How to take equity from house to fund BTL venture ?

Pigmy

I've done pretty much the same thing - again with 1st Direct - 1% above base rate. Stamp duty didn't apply as I was under the threshold.

Watch the end date of your 1st Direct product. They are unlikley to extend the term on the same rate so when you reach the end (did you say you had 6 years left?) you need to have some thoughts as to what you are going to do then.

geoffky

mikeyw wrote: »

Thanks guys - some useful advice. Speaking to first direct I reckon I should be able to secure 125K and aim to spend another 10K on refurb.

The interest is only 2.79% so a mere £290 per month (obviously there are other costs to consider and the rate will naturally rise)

Surely taking practically all the purchase money from 1stD is the cheapest way to fund this as some costs are waived as i'm an existing customer and recent mortgage newstarter with them. Getting a 75% BTL loan from elsewhere seems a more expensive approach

Someone mentioned trying to achieve yields of 10% - is this realistic these days ?

On a 100K house you'd need nearly £850 a month and that seems unrealistic anywhere in the UK...there might be so rare exceptions.

With lower borrowing costs these days isn't 6-8% enough ?

I'd be looking to take in £625 per month for a 2up 2down in Harrogate where the rental market has only 290 props versus nearly 1000 for sale within 3 miles of me.

This isn't a whim for me been looking to enter the market for several years now and don't want to miss the boat again as things appear to be picking up now.

Thanks again for all the excellent advice.

you will not miss the boat mike..as the boat is the titanic and will be hitting the iceberg in the next year i think...make sure you have a lifejacket as you are going to need one...
D o you really think the biggest housing bubble in history is going to be followed by a small downturn in prices.....i think not.....this is just the start of things.. good luck i think you are mad..

mikeyw

geoffky wrote: »

you will not miss the boat mike..as the boat is the titanic and will be hitting the iceberg in the next year i think...make sure you have a lifejacket as you are going to need one...
D o you really think the biggest housing bubble in history is going to be followed by a small downturn in prices.....i think not.....this is just the start of things.. good luck i think you are mad..

Well if we could predict the future we'd be millionaires - the economic outlook is starting to look better, my feel is the housing market will start to reflect this with a very gradual recovery, can't see any spikes up for a long while though.

I could wait another 2 years in the hope prices fall further by then they may have recovered 10-15%....who knows...

poppysarah

mikeyw wrote: »

, my feel is the housing market will start to reflect this with a very gradual recovery, can't see any spikes up for a long while though.

I could wait another 2 years in the hope prices fall further by then they may have recovered 10-15%....who knows...

Indeed who knows.

If you think the recovery is here though you'd have to explain to me how they've sorted out the billions and billions of chronic nasty debt the boom created.

sjcollett

In this market the pros are aiming for and achieving 10% plus. remember you make money when you buy, not when you sell.