BTL (or Landlord in general) as a tenant myself? + general questions

smallpurplepill

Hello all (I'm new on here!)

Can anyone advise on the below? (I realise legal advice and financial would be needed from a professional but as a pointer to start with)

Potentially interested in becoming a BTL or Landlord with money from savings and perhaps BTL mortgage.

Background is that despite reasonable salary, good credit history (credit cards, mobile contract all paid every month and no debts or adverse - have checked credit agencies for "rogue" wrong information and there is none) and around £100k in savings in the bank due to saving hard and buying almost nothing for 10 years I am still unable to get a mortgage for a house to live in myself due to not long enough in one job, address.

6 months in job so far (8 years in previous though), 2.5 years at current address, due to being made redundant and being given notice by a previous Landlord who was selling, respectively. (He didn't manage to sell and is now letting it again so this part of my history was actually ruined for nothing!)

Meanwhile not sure how it's happened but people 'below' me in the salary food chain are being offered mortgages at ridiculous * salary, admittedly this was a couple of years ago and I saw it was stupid then and refused to have any part of it, also to take money from 'Mum and Dad' since it's partly that that has caused unsustainable prices anyway.


Really just want to do things in the conventional way - however as this is being made very difficult by red tape and unrealistic restrictions (if someone is a first time buyer... that means they are probably now a tenant so why penalise them for decisions made by their Landlord that they had no control over?? Landlord wanting to sell is NOT me being irresponsible and having an unstable lifestyle!! :eek::mad:) I am now having to look at other options. Especially as savings as earning only a tiny amount of interest and in real terms actually reducing.

I am currently paying about £700 a month rent and a normal mortgage (if I could get one...) would be a lot less than this for the amount I would want to borrow and the given deposit (say £500 a month) but it's no go even though "rationally" a human can see that it is viable, computer says no!! :mad:

Have not made any formal mortgage applications as I've been advised that this will destroy credit rating even further so the above is just based on the 'discussions' stage.

As a tenant myself am I able to take out a BTL mortgage? (I understand that the criteria for this are different - as it's a commercial loan rather than for me to live in)

With that amount of savings I could also 'potentially' buy a small flat or house outright in some areas of the country but not sure if being a Landlord (BTL or otherwise) is considered "running a business" from my rented house and so against the lease agreement (and LL's insurance etc).. e.g. what address could I give tenants for serving notice?

Can I use the income from a property I let as additional income myself on a mortgage application (for me to live in)? Or is this totally separate thing?

It's been suggested to set up a separate Company (with me as director or whatever) and buy somewhere in the name of the company then 'let' to myself as we would be 2 totally separate legal entities but this sounds dodgy and not legitimate to me and obviously do not want to get involved in something that isn't 'above board'!

If anyone has any suggestions other than the BTL idea then these would be welcome also, I am quite open ended as to next steps as it cannot really get any worse from here.

Sorry if this sounds slightly churlish (at least I am not struggling to pay debt off as well for example) but 10 years of going without everything except bare essentials and having the same quality of life as if I had absolutely nothing and lived in poverty does start to grate when you realise it was all for nothing. (Probably should see a doctor or someone about some of this but this would be another "black mark" on my history I expect... I've given up ever thinking anything will be any different so willing to try anything really)

Thanks!

redlady_1

Er, so what do you want to know?? I couldnt really work it out from that post. Do you already own a property?

smallpurplepill

Sorry if it was not clear - I ended up rambling on slightly!

I guess what I am asking is some or all of the following..

- Can one take out a BTL mortgage as a tenant not a homeowner?

- Can one be a Landlord (BTL or owned outright) as a tenant not a homeowner given the restriction on "using rented property for business" (as being a LL is a business and you need to give an address to tenants for notices etc..)

- Can one use Landlord income as additional "salary" to boost a mortgage application for a personal residential property (or whatever it's called)

- Is the company suggestion dodgy? (though it sounds it!)

- (I don't think I explicitly asked this...) does having trouble with residential mortgage match other people's experiences in terms of job stability etc and so on - goodness knows what criteria you need to fulfil!!

- Any other suggestions for possible course of action as I am at my wits end and going round in circles!!



Edited to add: I don't already own a property no, I am "only" a tenant at this stage.

redlady_1

What are you actually trying to achieve? To be a landlord or own your own home? Im just trying to understand what your ultimate goal is as there are alot of things whizzing around in that head of yours!:D

smallpurplepill

Basically as I have the savings but unable to use them and actually losing money due to inflation and everything, 'ideally' I just want to move on from being a tenant (after 10 years of it..) and own somewhere myself but due to all the stuff I mentioned, seemingly isn't possible at this stage.

Therefore rather than sit back and do nothing and let the situation get worse, trying to think of ways I can actually use the savings and possibly get in a better situation for 1-2 years time.

Have thought about shares etc but it's a lot of money to lose!!

I am already doing a lot of the "money saving" stuff (good deals from utilities, doing surveys for extra cash, Tesco points etc etc etc) so think I need to do something more radically different.

As usual though struggling with red tape and unreasonable criteria! :rotfl:

redlady_1

Ah, so you want to own your own house but dont have enough saved up and cant get a mortgage? How about buying a smaller place with the money you can get on mortgage? Or a different area? You have a squeaky clean credit rating?

And you think buying a house is a guaranteed investment and you wont lose your money???! Unreasonable criteria? What is that exactly?

Investing your savings is one thing, buying a house is another. How much do you have saved as a matter of interest? There are plenty of things you can invest your money in even if you dont want shares. And actually, I know people who have made a tidy some buy buying and selling shares in this market. The key is knowing which ones to go for - as has always been the case.

orangeslimes

Do you mean you want to buy a house and then rent it to yourself? I don't think you can do that. (not sure if the company idea is illegal it might not be but is def dodgy and setting up company has lots of implications)

How many mortgage providers have you talked to? Have you asked about the situation in say 6 months when you will have been in your job a year?

smallpurplepill

redlady_1 wrote: »

Ah, so you want to own your own house but dont have enough saved up and cant get a mortgage? How about buying a smaller place with the money you can get on mortgage? Or a different area? You have a squeaky clean credit rating?

Yes pretty much, not sure if I have "enough" saved up (around £100k in bank but obviously would not just spend all of it and have nothing!) and been looking at places around £120-130 asking price but you can't get much for that price in this area and I am already looking in the cheapest areas here!

redlady_1 wrote: »

And you think buying a house is a guaranteed investment and you wont lose your money???! Unreasonable criteria? What is that exactly?

Not at all, who knows whether the 'House price crash' is still to happen or is a myth and it still may go down a bit but HPC or not it seems unlikely to lose all of the money the way you can with some investments! I am after additional income more than capital growth I think since you're right that (I think I've understood correctly) it is mad to rely on it going up in value like this.

Unreasonable criteria for mortgages - number of years at current address, amount of time in a job etc.

redlady_1 wrote: »

Investing your savings is one thing, buying a house is another. How much do you have saved as a matter of interest? There are plenty of things you can invest your money in even if you dont want shares. And actually, I know people who have made a tidy some buy buying and selling shares in this market. The key is knowing which ones to go for - as has always been the case.

As above about £100k and I absolutely agree that it's possible to make money from shares etc in this market (if you know what to buy!) but also a lot to lose given that this is the only money I have and don't have equity in a house to fall back on.

smallpurplepill

orangeslimes wrote: »

Do you mean you want to buy a house and then rent it to yourself? I don't think you can do that. (not sure if the company idea is illegal it might not be but is def dodgy and setting up company has lots of implications)

I think this is what the person was suggesting but it didn't sound right to me either! Thanks, this part is as I thought then (I'm not going mad in this respect anyway!! )

orangeslimes wrote: »

How many mortgage providers have you talked to? Have you asked about the situation in say 6 months when you will have been in your job a year?

Spoken to my bank (that I have current account with) plus a couple of others and current bank was initially encouraging (as it is a sales pitch really after all..) but I guess according to internal scoring systems I'm not a good enough 'risk' - Anything I actually have any influence over (paying credit cards on time etc) I have kept under control and not done anything "wrong" (defaults CCJs and so on).

Good idea to speak on the basis of having been at job for a year, I can try talking to a few more people about that, I think initially I was wanting to do 'something' as soon as possible since who knows in 6 months if the landlord will still have this house or will have sold and then I'll be back at the start of the 3 years again..

hermum

Have you spoken to an IFA, who doesn't charge a fee. I know that things have changed in the last 18 months or so. When my daughter bought her property she needed to be on the electoral role, to have had a contract of employment & to have been in the job for 6 months. It seems that if that hasn't changed you are likely to meet that criteria. Speak to your bank as they should be able to give you advice without a credit check as they will know what money you have.

Thrugelmir

smallpurplepill wrote: »

- Is the company suggestion dodgy? (though it sounds it!)

No it isn't. Though finding a lender that will advance monies to a Company as opposed to an individual isn't easy any longer.

Why are all your savings in the bank?

A good spread of investments using annual ISA allowance would be producing a reasonable return and income now.

Have you invested into a pension scheme at all?