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first time buyer - buying 2 properties, 1 for student let
arc30094
Posts: 2 Newbie
My boyfriend and I are first time buyers. I have £125,000 cash, my boyfriend has no cash. We currently earn approx £52,000 per year combined before tax and have no debt other than student loans.
We are currently in the process of buying our first house for £165,000 which we are planning to live in for a few months while decorating, then are thinking we may rent to students before the end of the year, and buy a second property as our home.
We are currently choosing our mortgage for our first property, but are not sure what is the best route to go down? We are looking at 5 year fixed rate (HSBC 4.64%) with a 60% deposit, meaning the monthly repayments will be approx £480 pcm, but will we have problems if we do decide to rent the property? Is it difficult to get permission to let to students? Also will we be charged a penalty? Would it be better to get a buy-to-let mortgage, and what would we then do if we didn't actually buy a second property and stayed living there ourselves??
Also how will the mortgage be assessed on our second property when we come to buy it? Will our rental income (approx £1,200 pcm) be considered when deciding how much to lend us (because this is will easily cover the mortgage on the first property) or will it purely be based on our wages?
Sorry I have so many questions - but as a first time buyer this all feels very complicated and we need to make a decision quite soon!
Any advice would be greatly appreciated!
We are currently in the process of buying our first house for £165,000 which we are planning to live in for a few months while decorating, then are thinking we may rent to students before the end of the year, and buy a second property as our home.
We are currently choosing our mortgage for our first property, but are not sure what is the best route to go down? We are looking at 5 year fixed rate (HSBC 4.64%) with a 60% deposit, meaning the monthly repayments will be approx £480 pcm, but will we have problems if we do decide to rent the property? Is it difficult to get permission to let to students? Also will we be charged a penalty? Would it be better to get a buy-to-let mortgage, and what would we then do if we didn't actually buy a second property and stayed living there ourselves??
Also how will the mortgage be assessed on our second property when we come to buy it? Will our rental income (approx £1,200 pcm) be considered when deciding how much to lend us (because this is will easily cover the mortgage on the first property) or will it purely be based on our wages?
Sorry I have so many questions - but as a first time buyer this all feels very complicated and we need to make a decision quite soon!
Any advice would be greatly appreciated!
0
Comments
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How many students are you planning on renting it to?
If it is 3 or more you may as well forget it. New planning laws will most likely stop you (subject to local conditions).I can take no responsibility for the use of any free comments given, any actions taken are the sole decision of the individual in question after consideration of my free comments.
That also means I cannot share in any profits from any decisions made!;)0 -
We plan to rent to 4 students. the property is in the heart of a university city, and as we have both been students in this city; we know the market quite well.
We both also have good knowledge of planning law and local policy, and do not foresee a problem in this respect.
What we are unsure about is from the perspective of the bank - we are unsure if lenders will allow "permission to let" for student rental, and what penalties they might impose
furthermore, what affect will this have when we go to apply for a mortgage for our second property?0 -
Good knowledge is sometimes not enough.....
Read here:
http://forums.moneysavingexpert.com/showthread.html?t=2287701&highlight=I can take no responsibility for the use of any free comments given, any actions taken are the sole decision of the individual in question after consideration of my free comments.
That also means I cannot share in any profits from any decisions made!;)0 -
It is a trap many people are going to stumble into, and the legislation is so poorly known about. Mainly because it is not finalised until the middle of this month, ready to be implemented on the 6 April 2010.
I know of many lettings agents who were not even aware. Cloak and dagger stuff this new legislation, of course it is hailed as the antidote to studentification issues, but of course the reality is that it creates a monopoly for current HMO landlords - just means they can up their rent and drop their standards as new competition is removed from the market.
What student City are you in?I can take no responsibility for the use of any free comments given, any actions taken are the sole decision of the individual in question after consideration of my free comments.
That also means I cannot share in any profits from any decisions made!;)0
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