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  • FIRST POST
    • TiredDonna
    • By TiredDonna 6th Oct 17, 8:37 AM
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    TiredDonna
    What should my boyfriend do in this situation?
    • #1
    • 6th Oct 17, 8:37 AM
    What should my boyfriend do in this situation? 6th Oct 17 at 8:37 AM
    I am in my late thirties with my own home and am working on being mortgage-free by the time I'm forty. My boyfriend of nearly two years is in his early forties and has no property but moved in with me last year. We split the bills and he has some healthy savings for a deposit on his own house. Next year he may possibly do a PhD, supplementing his scholarship with earnings from consultancy. He worries about security in his old age.

    He had intended to invest in a property, renting it out. However, he has now learned that he cannot do this, but must live in the property for one or two years (depending upon the mortgage provider) before he can rent it out. His question is what should he do now?

    His friend (works in property) says to forget the legalities, buy a house and rent it out anyway. We do not feel that is an option.

    Should he buy a house and leave it empty until he can rent it? Neither of us is comfortable with owning an empty property. He could get a doer-upper to make the most of that time, but I'm not sure either of us would enjoy spending our leisure time doing this.

    Should he just continue saving up money and see what the situation is in a couple of years?

    Any thoughts would be appreciated.
Page 1
    • gettingtheresometime
    • By gettingtheresometime 6th Oct 17, 8:47 AM
    • 2,858 Posts
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    gettingtheresometime
    • #2
    • 6th Oct 17, 8:47 AM
    • #2
    • 6th Oct 17, 8:47 AM
    Couldn't he have a btl mortgage or doesn't he have enough of a deposit / want to pay the (presumably) higher interest rates?
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    • Pixie5740
    • By Pixie5740 6th Oct 17, 8:49 AM
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    Pixie5740
    • #3
    • 6th Oct 17, 8:49 AM
    • #3
    • 6th Oct 17, 8:49 AM
    Is his friend a letting agent by any chance?
    Why can’t he just get a BTL mortgage like any other landlord? In fact why does he want to invest in property in the first place, why not some other investment vehicle(s)?
    Annual income twenty pounds, annual expenditure nineteen pounds nineteen and six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds nought and six, result misery.
    • LandyAndy
    • By LandyAndy 6th Oct 17, 8:53 AM
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    LandyAndy
    • #4
    • 6th Oct 17, 8:53 AM
    • #4
    • 6th Oct 17, 8:53 AM
    Couldn't he have a btl mortgage or doesn't he have enough of a deposit / want to pay the (presumably) higher interest rates?
    Originally posted by gettingtheresometime
    Is his friend a letting agent by any chance?
    Why can’t he just get a BTL mortgage like any other landlord? In fact why does he want to invest in property in the first place, why not some other investment vehicle(s)?
    Originally posted by Pixie5740

    Don't you have to already own a property to get a BTL mortgage on another?
    • gettingtheresometime
    • By gettingtheresometime 6th Oct 17, 8:55 AM
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    gettingtheresometime
    • #5
    • 6th Oct 17, 8:55 AM
    • #5
    • 6th Oct 17, 8:55 AM
    Don't you have to already own a property to get a BTL mortgage on another?
    Originally posted by LandyAndy


    I thought a BTL mortgage was a mortgage you got when you weren't going to live in the property yourself, regardless of whether you owned a property or not
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    • TiredDonna
    • By TiredDonna 6th Oct 17, 8:56 AM
    • 13 Posts
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    TiredDonna
    • #6
    • 6th Oct 17, 8:56 AM
    • #6
    • 6th Oct 17, 8:56 AM
    Re Buy-to-let mortgages, my boyfriend understands that you already need to be home-owner/have a mortgage.

    The friend is not a letting agent something to do with conveyancing.

    He would certainly be open to other investments if they could be readily converted in to a roof over his head should he need one.
    • Pixie5740
    • By Pixie5740 6th Oct 17, 8:58 AM
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    Pixie5740
    • #7
    • 6th Oct 17, 8:58 AM
    • #7
    • 6th Oct 17, 8:58 AM
    Don't you have to already own a property to get a BTL mortgage on another?
    Originally posted by LandyAndy
    Not necessarily. Yes already owning your home is a requirement of some lenders but not all. Lenders that do offer BTL mortgages to non-homeowners assess the borrower as if they were getting a residential mortgage to ensure the borrower isn’t trying to use a BTL mortgage to purchase a property they couldn’t otherwise afford.
    Last edited by Pixie5740; 06-10-2017 at 9:01 AM.
    Annual income twenty pounds, annual expenditure nineteen pounds nineteen and six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds nought and six, result misery.
    • ScorpiondeRooftrouser
    • By ScorpiondeRooftrouser 6th Oct 17, 8:58 AM
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    ScorpiondeRooftrouser
    • #8
    • 6th Oct 17, 8:58 AM
    • #8
    • 6th Oct 17, 8:58 AM
    No rented house, regardless of mortgage circumstances, can be "readily converted to a roof over his head should he need one". If you are lucky it might be, but if not it can take months.
    • rtho782
    • By rtho782 6th Oct 17, 8:59 AM
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    rtho782
    • #9
    • 6th Oct 17, 8:59 AM
    • #9
    • 6th Oct 17, 8:59 AM
    Most BTL providers won't give you a BTL mortgage if you don't own your own home to live in.
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    • Pixie5740
    • By Pixie5740 6th Oct 17, 9:00 AM
    • 11,006 Posts
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    Pixie5740
    Re Buy-to-let mortgages, my boyfriend understands that you already need to be home-owner/have a mortgage.

    The friend is not a letting agent something to do with conveyancing.

    He would certainly be open to other investments if they could be readily converted in to a roof over his head should he need one.
    Originally posted by TiredDonna
    Your boyfriend understands incorrectly and should seek advice from a mortgage broker.

    That is very worrying that his friend, who works in conveyancing, thinks that mortgage fraud is acceptable.
    Annual income twenty pounds, annual expenditure nineteen pounds nineteen and six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds nought and six, result misery.
    • greendoor665
    • By greendoor665 6th Oct 17, 9:06 AM
    • 25 Posts
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    greendoor665
    He could invest in funds within stocks and shares ISAs, these are very liquid and can be sold and converted to cash within a couple of days. This might be a better option than becoming a landlord?

    If he had a property that he rented out and then wanted to move in to, it could take many months to get the tenants out and move in himself. In fact it could be far quicker to sell investments and go through the whole process of buying a new house than to legally evict tenants!

    If it's an investment for his future and the security of having a roof over his head he wants, there are better options than buying a property to rent out.
    • TiredDonna
    • By TiredDonna 6th Oct 17, 9:27 AM
    • 13 Posts
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    TiredDonna
    Thank you for your replies, they are helping me see the situation more clearly. It is useful to hear that property is not necessarily the best long-term investment.

    Financial advice is something he is arranging, but we were curious to learn a bit more sooner, hence the thread.
    • HouseBuyer77
    • By HouseBuyer77 6th Oct 17, 10:02 AM
    • 895 Posts
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    HouseBuyer77
    This thread may be better off in the Pensions & Retirement board or the Savings & Investment board.

    Does your boyfriend have a pension? He should look into that too.

    Property can provide a decent income but it's by no means straight-forward or without risk. You may find you're spending more than you're earning in rent when you have a small deposit. The difference between the mortgage payments and rent can quickly get eaten up by maintenance issues and rental voids (time where you have no tenant) or tax (if your boyfriend is a 40% tax payer the tax relief he can claim on mortgage payments is reduced). If you get a bad tenant and/or have some major maintenance issues you could go a year or two spending major money on the house.

    A lot of the return in BTL in the past has come from house price inflation, not the regular income it provides.

    It sounds like he's just decided property is the way to go without really understanding it. He needs to read up on what being a landlord involves, the various tax implications (extra stamp duty if he buys another house, capital gains tax to pay, the tax treatment of maintenance costs, mortgage insurance costs and how this changes if you move into the 40% band etc), understanding the financing and the risks.
    • TiredDonna
    • By TiredDonna 6th Oct 17, 11:10 AM
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    TiredDonna
    Yes! I did struggle to decide where to post this query
    • Comms69
    • By Comms69 6th Oct 17, 11:19 AM
    • 486 Posts
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    Comms69
    Re Buy-to-let mortgages, my boyfriend understands that you already need to be home-owner/have a mortgage.

    The friend is not a letting agent something to do with conveyancing.

    He would certainly be open to other investments if they could be readily converted in to a roof over his head should he need one.
    Originally posted by TiredDonna


    Well this investment would take 40 weeks before he had a roof over his head, and that's after the fixed term expired....


    Most other investments don't take that long to liquidate.
    • Slithery
    • By Slithery 6th Oct 17, 11:31 AM
    • 257 Posts
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    Slithery
    At a minimum. If tenants have just signed a new 12 month contract it could take up to 18 months to get rid of them.

    That's not liquid at all.
    • TiredDonna
    • By TiredDonna 6th Oct 17, 11:43 AM
    • 13 Posts
    • 4 Thanks
    TiredDonna
    Yes, I can clearly see I shouldn't have used the word "quickly" and have been taken to task for that.
    • TiredDonna
    • By TiredDonna 6th Oct 17, 11:44 AM
    • 13 Posts
    • 4 Thanks
    TiredDonna
    Or "readily" which is what I did say, and I was thinking in comparison with his pensions.
    • xylophone
    • By xylophone 6th Oct 17, 12:01 PM
    • 23,124 Posts
    • 13,400 Thanks
    xylophone
    Your friend has checked his state pension situation?

    https://www.gov.uk/check-state-pension

    He has several pensions and is currently contributing to a pension?

    Would he consider buying a home in an attractive location which would be his PPR ?

    He would register all his bank accounts there/ be on electoral roll there.

    There would be nothing to prevent his staying with you during the week/as and when convenient or your staying with him at weekends/as and when convenient?

    A family member owns a house (PPR) in the north, is there at week ends and on work from home days but lodges closer to work in the south on other days.
    • Lysimache
    • By Lysimache 6th Oct 17, 1:47 PM
    • 53 Posts
    • 20 Thanks
    Lysimache
    A mortgage broker can advise him best as there are a few lenders who will offer a BTL without him having to own a property before or be a residential mortgage owner.
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