Q I’m in my early 20s and just about to finish university. Through university scholarships and working, I have been able to save about £20,000. I want to buy a property once I start working (I’m due to start earning £30,000 from September) but know I won’t be able to afford somewhere in London on a single salary for many years, even with all that I’ve saved. I’m reluctant to buy into a shared-ownership scheme as I have concerns about being priced out of buying the rest of the property as property prices continue to rise, alongside the rent that I would have to pay in addition the mortgage. Therefore, I was considering buying a flat in another city (such as Nottingham, Glasgow or Birmingham), so that I could rent it out while still living at home and continue to save for my next property. Are there any drawbacks to this? I am worried about taking on the responsibility of renting out a property but, equally, do not want my savings to devalue in my account as inflation and property prices continue to rise. I am unsure how long it would be before I would be able to afford a nice flat in London that didn’t have more than an hour of commuting time. TA A Yes, there are drawbacks. The main one is that buying a property to rent out – rather than a home to live in – means that you won’t qualify for first-time buyer relief from stamp duty land tax (SDLT), which is available on a property in England or Northern Ireland. This makes the first £300,000 of the purchase price of a property costing up to £500,000 SDLT-free, with the amount over £300,000 charged at 5%. It will also mean that if you go on to buy a property for yourself without selling the rental property, you will have to pay SDLT at the higher rate (standard rate plus three percentage points) on the purchase price of your home. In Wales there is no relief for first-time buyers, while in Scotland first-time buyers get tax relief on the first £175,000 of a property’s value. Then there’s the fact that buying a rental property will mean that you have to take out a buy-to-let mortgage rather than a residential one. The downside of this is that buy-to-let mortgages typically don’t let you borrow more than 75% of the mortgage lender’s valuation of the property (which is not the same as the purchase price). So with a cash deposit of £20,000, the most you would be able to borrow would be £60,000, meaning spending no more than £80,000 on a property, which could be a struggle, even in the provinces. With a residential mortgage, some lenders are prepared to lend up to 95% of the value of a property, so, in theory, your £20,000 deposit could help you buy a £400,000 property. However, in practice, given your earnings, it’s unlikely that you would be able to borrow as much as £380,000. Taken with your concern about becoming a long-distance landlord, the financial realities suggest that it may be time to reconsider your options – and maybe reinvestigate shared ownership – if you don’t want your savings to lose real value in a low-interest savings account. This article was amended on 9 May 2022 to clarify that SDLT only applies in England and Northern Ireland, and to explain the equivalent situation for first-time buyers in Wales and Scotland. Want expert help finding your new mortgage? Use our online tool to search thousands of deals from more than 80 lenders with the Guardian Mortgage Service, powered by L&C.