Buying a property with £10,000

willj

Hi . I am currently living with my parents and have come into ten thousand pounds. Would there be any chance I could get into the buy to let market with this amount? I would like to but somewhere preferably in the North West London area, where I live. Thanks.

PasturesNew

Why would you want to do that?

£10k's not enough in most places. Most BTL mortgages want you to have your own home already and/or a salary that will pay the mortgage you're applying for.

You're better off forgetting it with that much, to be honest.

googler

Do you have any source of regular income at present?

toffee87

In London I would have thought it's unlikely.Some mortgage lenders take deposits of 10-15% but many want 25%. I very much doubt £10,000 would suffice.

vaporate

More sense to put 10k in a bond.

Buying a insane overpriced property is not the way to go.

sharkie

It is not often that I disagree with PasturesNew, however if you are working AND have loads of surplus cash, or parents willing to help it is an excellent idea.

firstly see a mortgage advisor to see how much btl cash you can raise. Legal fees, stamp duty??? etc takes a few £1000's and you will probably want a mortgage you can add into without getting penalised.

Then buy what you can afford, taking into account how much you can rent it for. Basically you have to be sure that the property market will go up too. Make sure you buy well and a large proportion of the mortgage is covered by the rent.

remember, mortgage rates will increase too

PasturesNew

sharkie wrote: »

It is not often that I disagree with PasturesNew

And I think you have a hangover today since you chose to do so!

sharkie wrote: »

...if you are working AND have loads of surplus cash, or parents willing to help it is an excellent idea.

firstly see a mortgage advisor to see how much btl cash you can raise. Legal fees, stamp duty??? etc takes a few £1000's and you will probably want a mortgage you can add into without getting penalised.

Then buy what you can afford, taking into account how much you can rent it for. Basically you have to be sure that the property market will go up too. Make sure you buy well and a large proportion of the mortgage is covered by the rent.

remember, mortgage rates will increase too

Lots of ifs ....

googler

Before putting £1ok or more into an investment, you need to decide what you want to get out of that investment.

In the case of a BTL, you might want it on the assumption it will increase in value over the long term and you sell it at a profit, having covered your outlays with the rental income in the meantime.

You might want it to bring in a regular income, in which case your rental must cover all your outlays in order to bring in profit every month.

Have you given thought to all of this?

Do your parents have any thoughts on the subject?

---

You might also give some thought to alternative ways to invest it - stocks and shares can pay dividends far above that of an interest-earning bank account, but carry a risk.

Premium Bonds can multiply your investment many times over IF you win, but can only be sold at their face value if you don't.

Safe investments include the 3% or so that you could earn from an interest-earning bank account, or similar building society investment. Compound interest would increase your £10k to roughly £10,300 after 1 year, £10,609 after 2, £10,907 after 3 3, etc etc - but that relies on you leaving the money alone whilst this happens.

You need to decide what you want out of your money before you decide how to invest it.

sharkie

PasturesNew, Life is full off ifs and buts. If I had a working crystal ball I'd be winning the lottery every weekend - just because I could, but I end up rolling the dice like everyone else.

Willj, just start young. If you mess up when your are young, if gives you much more time to recover and you have greater time to amass wealth - but make sure your other half signs a prenuptial

sarahevie

In the current mortgage climate £10,000 won't be enough for a BTL product.

Mortgage Works recently offer an 80% LTV product but that would only allow a £50,000 property.

Most other lenders are requiring 70% or 75% LTV, which means that the OP could only borrow against a £40,000 property. I cannot see how these will be available in North London.

This is without taking fees into account.

anotherginger

in north west london i don't think 10000 is going to get you very far.