If you are looking to purchase a second or additional property as an investment then Buy To Let is an option - even if you think you might sell the property immediately on completion. At an interest rate of around base + 1%, this is the next cheapest option after a homeowner mortgage.

Lenders do frown on this practice, however, and if you carry out more than once the cycle of taking out a buy-to-let mortgage and then selling the property as soon as it's refurbished, they will get wise to you and may refuse you finance in the future.

Typically you need to provide 20% of the property value as a deposit. So, if you wanted to borrow £80k to purchase a flat and £20k for development (total £100k), then you would need to provide £20k deposit. Some lenders ask for 15%.

Once you have this basic deposit, the mortgage company will loan an amount based on the rental income of the property you are purchasing, where rental income must be a minimum of 130% of the mortgage payments.

Remember in your calculations to make absolutely sure that there are no mortgage redemption charges (otherwise you will be penalised heavily if you later decide to sell the property).

If you intend to apply for this type of mortgage - whether or not you plan to sell after you have developed it - you must research the rental values in your area. The mortgage company will check your figures and refuse to lend you the money if your calculations are wrong.