Buy to let to live in first!

Jewel_2

Right, here goes.

Our house is due to exchange any day (we are the sellers). In approximately 6 weeks time we will be out, with nowhere to live :eek:. There are three of us (mum, dad, 10 year old), and we are going to stay in the same area.

If anyone has read any of my threads before, we have a varied income (!) so a 'normal' mortgage wouldn't buy us what we are after. We have our own businesses, part time normal work etc, but our own businesses don't have three years of accounts yet. We have been advised that we could do with a 25% deposit. We will come out of this house we are currently selling with about £50,000 equity, but we could do with saving another £75,000 before we buy anywhere for us to live long term.

So ... this may be silly, but we thought inthe interim we would buy a 2 bed flat (in our city which is a commuter area into London). The figures would work out mortgage-wise (looking at approx £200,000 mortgage), and then save like billy-o while living in it for about 18 months. Then we would turn our flat into a buy to let, and buy the type of property we want. We assume we would need 25% equity in the flat too.

Is this a good idea or not. If you think not, do you have any other suggestions? Would it be better to rent for 18 months?

Many thanks xx

Fire_Fox

You need to first ask if the mortgage lender is likely to give you consent to let, if the freeholder needs to give you permission to let (it varies), if the letting market is strong in that area, if the figures stack up (higher interest rates, service charges, income tax, capital gains tax), could you manage two mortgages if flat was empty ...