Thinking about buying property when you’re already carrying debt? It’s a bit like a juggling act, really. On the one hand, you’re gripping bills that need to be cleared, but on the other hand, you have a shiny new key to unlock property investments that can give you a way to clear the debts. You could open the door, but will it give you the right path or just land you in more financial bother?
Let’s explore this further.
Before You Think About Investing
Let’s be honest – most people already owe something. It might be credit card debt, a mortgage for personal property, car finance or an overdraft. Right now, the UK’s total household debt stands at around £1.8 trillion, which works out to around £66,000 per household on average. And that is for all debts, loans, credit cards, mortgages, etc.,
Mortgage balances alone averaged just under £185,000 in early 2025. These are some huge numbers we’re talking about that seem almost normal for many people.
The thing is, adding another property to this mix isn’t as simple. especially if you’re already behind on payments that quickly slide out of your account every month. Financial advisors tend to repeat one golden rule: sort out the high-interest stuff first – the credit cards, store finance, payday loans, etc. – before you start making investments. Because investment returns aren’t guaranteed, debt repayments are.
There are still plenty of people who balance both, so it’s not always a case of no, you should not invest when you’re in debt. It’s about whether you can afford it without tipping the scales.
When It Makes Sense – and When It Really Doesn’t
Sometimes the math actually works in your favour. If your debts are on the low-interest side and your income is steady, then you have an emergency buffer waiting in the wings, go for it. It can be a smart long-term move for your finances. This is the classic leverage idea – using one form of debt (mortgage) to build something that earns.
But then there’s the other side. When your budget is already stretched too thin – minimum payments, no savings cushion – adding a buy to let can turn risky fast. Sure, the average UK rental yields are around 7.26% right now (gross before costs), but that’s a headline figure, not what hits your bank – there’ll be variations and costs to pay this so it’s not a money spinner, even though it might look good on paper.
Getting The Right Advice
If you’re seriously considering this move, then it’s vital you get the right advice, whether you’re sitting comfortably right now or you have debts creeping up, but it’s an opportunity you don’t want to miss out on.
Working with people who know the market as well as the numbers can be invaluable. A good way to get some advice and help for this part of your investment journey is to work with people with a proven track record in the sector, such as Lifestyle Property Group, who can help you out at each stage of the journey to make the most of your investment.
It doesn’t mean the risk disappears. Far from it. You just have more knowledge and expertise at your fingertips to react better to it and make smart decisions.
Questions to Ask First
Thinking of going ahead? Here are some questions you should ask yourself first.
How much of your income already goes on repayments?
Could you cover debts for your current commitments and your new property if it sat empty for 3 months?
If interest rates jump again – and they might – does your plan still hold?
What if the boiler dies, your roof leaks or the tenant doesn’t pay? What are your backups?
And the big question: are you after building wealth for the long term or a quick fix to help you pay off debts right now? If you’re trying to outrun a situation, this might not be the smartest move for you.
Weighing It Up
Close your eyes and picture a set of scales. On one side is everything you already owe, on the other – the shiny new property dream. If your existing debt feels too heavy on one side, maybe pause for now. If it’s under control and balanced, you have breathing space, and you can move forward if you feel it’s right.
Remember: high-interest debt – pay it off first. Low-interest debt, savings and a steady job? You have options.
While it is possible to invest in property when you’re in debt, it’s not always the right decision or the right path to take now. Get someone to be honest with you, run the numbers for the worst-case scenario and make a decision with your head, not your impulses.
