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  • FIRST POST
    • pogo16769
    • By pogo16769 8th Jul 17, 10:20 AM
    • 4Posts
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    pogo16769
    Buying flat for son to use whilst at Uni
    • #1
    • 8th Jul 17, 10:20 AM
    Buying flat for son to use whilst at Uni 8th Jul 17 at 10:20 AM
    hi
    son is away to uni and we are looking to get a flat, have looked at renting but cost much the same as buying. Have seen a flat around the £70,000 mark but the problem is we don't have much deposit, I could get 5% but would really be looking for 100% mortgages. As would be not be renting the flat to him, this would be a second home not a BTL. Can anyone tell me what my best options would be, any advise would be must welcome.
Page 1
    • silvercar
    • By silvercar 8th Jul 17, 10:25 AM
    • 35,891 Posts
    • 151,116 Thanks
    silvercar
    • #2
    • 8th Jul 17, 10:25 AM
    • #2
    • 8th Jul 17, 10:25 AM
    Could you raise the money by taking a larger mortgage on your current home - either to raise the deposit or to fund the whole purchase?
    • Wake up call
    • By Wake up call 8th Jul 17, 12:29 PM
    • 74 Posts
    • 312 Thanks
    Wake up call
    • #3
    • 8th Jul 17, 12:29 PM
    • #3
    • 8th Jul 17, 12:29 PM
    At best it will be considered a second property so you will have a 3% stamp duty surcharge to consider as well.
    • Thrugelmir
    • By Thrugelmir 8th Jul 17, 12:34 PM
    • 55,239 Posts
    • 48,491 Thanks
    Thrugelmir
    • #4
    • 8th Jul 17, 12:34 PM
    • #4
    • 8th Jul 17, 12:34 PM
    As would be not be renting the flat to him, this would be a second home not a BTL.
    Originally posted by pogo16769
    How would you justify this a second home if you have no intention of occupying the property yourselves. What are your plans for the property once your son has graduated?
    “ “Bull markets are born on pessimism, grow on skepticism, mature on optimism, and die on euphoria. The time of maximum pessimism is the best time to buy, and the time of maximum optimism is the best time to sell.” Sir John Marks Templeton
    • buglawton
    • By buglawton 8th Jul 17, 12:43 PM
    • 6,886 Posts
    • 3,129 Thanks
    buglawton
    • #5
    • 8th Jul 17, 12:43 PM
    • #5
    • 8th Jul 17, 12:43 PM
    The lender will classify it as a 2nd home.
    • pogo16769
    • By pogo16769 8th Jul 17, 1:50 PM
    • 4 Posts
    • 0 Thanks
    pogo16769
    • #6
    • 8th Jul 17, 1:50 PM
    • #6
    • 8th Jul 17, 1:50 PM
    Thanks for your replies, could fund deposit with extra from current house.
    Stamp I have found that as it a second home would have to pay, not sure what the current rate is in Scotland at the moment. After my son has finished uni, my daughter may also go there so she could use it or I would sale the flat on after that.
    • dimbo61
    • By dimbo61 8th Jul 17, 4:39 PM
    • 9,463 Posts
    • 5,125 Thanks
    dimbo61
    • #7
    • 8th Jul 17, 4:39 PM
    • #7
    • 8th Jul 17, 4:39 PM
    Hi,
    Buying and selling after only owning for 3 years could prove expensive when you take into account Extra stamp duty, survey, legal costs, management charges etc.
    You have to hope that son get through his course and daughter also wants to go to the same university !
    Many students want to enjoy the university experience of living in halls and then moving into a house together in a group of upto 4/5/6/7/8 and even 10.
    If you bought a 2 bed flat your son would be the landlord with a lodger !
    No student fees in Scotland ?
    • davidmcn
    • By davidmcn 8th Jul 17, 6:32 PM
    • 5,800 Posts
    • 5,549 Thanks
    davidmcn
    • #8
    • 8th Jul 17, 6:32 PM
    • #8
    • 8th Jul 17, 6:32 PM
    No student fees in Scotland ?
    Originally posted by dimbo61
    If you're Scottish, yes.
    • pogo16769
    • By pogo16769 8th Jul 17, 6:37 PM
    • 4 Posts
    • 0 Thanks
    pogo16769
    • #9
    • 8th Jul 17, 6:37 PM
    • #9
    • 8th Jul 17, 6:37 PM
    No if you live in Scotland
    • PField
    • By PField 9th Jul 17, 8:16 AM
    • 79 Posts
    • 57 Thanks
    PField
    If you borrow the deposited from your main home and get a BTL mortgage, you can get tax relief on the interest on the whole £70k not just the BTL amount. So if you rent the flat to your son and later on to your daughter for a small amount so you don't make a profit, you can claim tax relief on the entire loan (if you make a maker loss you can carry that forward to reduced any tax bill in the future). If your son could take in a lodger it would probably pay the interest on the whole flat ( around £200 a month) in its entirety.
    So if you over pay a bit you may probably find you own the flat outright by the time your daughter finishes.
    Last edited by PField; 09-07-2017 at 8:18 AM.
    • getmore4less
    • By getmore4less 9th Jul 17, 8:29 AM
    • 29,803 Posts
    • 17,818 Thanks
    getmore4less
    If you borrow the deposited from your main home and get a BTL mortgage, you can get tax relief on the interest on the whole £70k not just the BTL amount. So if you rent the flat to your son and later on to your daughter for a small amount so you don't make a profit, you can claim tax relief on the entire loan (if you make a maker loss you can carry that forward to reduced any tax bill in the future). If your son could take in a lodger it would probably pay the interest on the whole flat ( around £200 a month) in its entirety.
    So if you over pay a bit you may probably find you own the flat outright by the time your daughter finishes.
    Originally posted by PField
    On £70 k with interest starting at around £200pm to pay of over 6 years that bit will be an extra £850pm
    • silvercar
    • By silvercar 9th Jul 17, 8:58 AM
    • 35,891 Posts
    • 151,116 Thanks
    silvercar
    If you borrow the deposited from your main home and get a BTL mortgage, you can get tax relief on the interest on the whole £70k not just the BTL amount. So if you rent the flat to your son and later on to your daughter for a small amount so you don't make a profit, you can claim tax relief on the entire loan (if you make a maker loss you can carry that forward to reduced any tax bill in the future). If your son could take in a lodger it would probably pay the interest on the whole flat ( around £200 a month) in its entirety.
    So if you over pay a bit you may probably find you own the flat outright by the time your daughter finishes.
    Originally posted by PField
    Three provisos:

    losses can only be carried forward against other rental losses, not income from other businesses or PAYE income tax.

    You will have to decide if the lodger is sub renting off the son (so son keeps the money under the rent a room scheme and then son rents of parent or whether the lodger is a joint tenant with son and pays rent to parent. If the latter then you will need all the rules on being a landlord to be ticked off eg gas safety certificate, landlord insurance.....

    I doubt you will be able to get a BTL mortgage if you have a relative as the tenant, most BTL mortgages won't allow that.
    • glennevis
    • By glennevis 9th Jul 17, 10:16 AM
    • 112 Posts
    • 82 Thanks
    glennevis
    If you really want to become a landlord in Scotland read up about your responsibilities first.

    You could try this link
    https://rentingscotland.org/

    It would almost certainly cost you extra to bring the flat up to the Repairing Standard before it could be rented out.
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