UK Property Investment: How to Invest Without Mortgage

Investing in properties is one appealing option to secure our financial future. But for some people, the unavailability of cash for upfront payment becomes a big barrier to their investment dreams. But do you really need your money to buy properties?

There are several ways to invest in properties in the UK without having cash. Now, you may be thinking about a mortgage, but that’s not where we are going. Not everyone can access a mortgage. 

Some investors live overseas and do not have a credit history in the country, while others cannot access a mortgage because of poor credit. There are even people who already have several mortgages to pay off. So, do you need a mortgage for property investment? 

Well, the idea may not be appealing to all. Therefore, if you are in this category, let’s show you how to invest in properties without a mortgage.

What is the Smart Alternative to Mortgage?

Due to the strict lending standards and high-interest rates that come with mortgages, investors are seeking other means of accessing credit. So, what’s the smart alternative? 

1. Property Fund

This is a smart way to penetrate the asset classes without a mortgage or becoming a landlord. There are various forms of property funds that can help you access the sector.

A property fund is an investment in commercial properties like a retail space, warehouse, factory, and office. The investors make some deposits, which the investing agency pools together to purchase assets. The funds are invested in 2 ways:

  • In commercial properties (direct method)
  • Investing in other property companies or property funds (indirect method)

Investing in Commercial Properties

Accessing commercial properties is a benefit that you can’t get without a network. So, investing in funds that buy and rent out physical properties may be a smart way to diversify your portfolio. In the long run, you won’t need to take a personal debt.

Due to the fact that commercial leases are long-term, investing in this type of property fund has an advantage. It provides a measure of immunity to the fluctuations in the short-term market. It also provides quite a stable stream of income. 

However, before you invest, look for agencies or companies that have a good track record in the property market. They should deliver consistent yield all through the market cycles. You may want to check out this website to learn more about investing in commercial properties.

Investing in Listed Companies

This is another method of property fund investment. It invests in equities that are related to property. You can invest in companies like building contractors, manufacturers of construction materials, and REITs (real estate investment trusts).

In this kind of investment, you must know that the returns from the funds within the short-term may closely correspond to equities. This is because the wider stock market activities will impact the holdings. However, the idea over the longer-term is that the company’s earning returns and growth will be directly related to the housing cycles. Or to the properties themselves if you invest in REITs.

2. Buying and Flipping UMV

Buying and flipping under market value properties is a popular investment strategy. It is also an easy method that you can get wrong, that is if you do not do enough research. What many people do is to hunt for bargains by looking out for off-market or auction properties like repossessed buildings or those from ex house owners. 

After that, they deploy financial strategies such as a bridging loan to secure credit without being in the black book of a mortgage broker. This strategy generates huge capital gains if you do it the right way.

However, it comes with some hidden costs. For instance, if you under-evaluate the refurbishment costs, you may get rinsed for costs that would have been avoided such as electrical repairs. You may want to visit to read more about buying and flipping houses.

3. Property Lease

This is an untapped property investment option that offers little upfront costs. Owning a lease allows you to rent out the property without purchasing it. All you need to do is to make a legal agreement with the owner. This agreement should include the lease duration and the purchase price if you decide to buy the property later. You could also consider the help of a company like AMS Housing Group to help to guarantee your rental income, when it comes to renting the property out.

So, with a little upfront investment, you will enjoy a steady stream of rental income without the trouble of getting a mortgage. Also, if the price of the building appreciates beyond the initial purchase price, you will gain instant equity.


Due to the high population of students and young professionals in the UK, there is a huge demand for rental houses. Therefore, investing in properties in the country is a lucrative sector. And if you cannot access a mortgage, you can explore the methods we discussed.

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