1 bedroom v 2 bedroom

liam1989

good afternoon everybody.

i just have a question to ask regarding my current predicament. i am currently very close to buying my first home :j - i almost have my 20% deposit and have also enough saved for the expenses required in moving. however i am unsure as to whether i should go for a one bedroom flat/apartment or 2. my idea was to buy a 2 bedroom property and to rent out the other room for a year or two just to help me with the mortgage and to bring in some extra income. now i was speaking about this to my father and he advised that a few lenders may not like this and may increase the rates on my mortgage. basically i just need advise on whether i should just go for a one bedroom flat (which is must cheaper than a 2 bedroom around 20-30k less) or do you think i will be ok still looking for a 2 bedroom.

your responses will be very much appreciated.

thanks for reading

Jowo_2

Generally, lenders are not bothered by a home owner having a lodger (someone who lives in the same property as the landlord who shares amenities with them) but you should check your property insurance covers this.

I think your father is muddling the situation with a tenant - someone who rents the property for their exclusive use and the landlord lives elsewhere. There are sometimes problems with someone who has a residential mortgage who then wants to rent out the entire property, who are obliged to get permission from their lender, may be required to pay a fee or switch to a buy to let mortgage which has a higher rate of interest.

poppy_f1

2 beds will always be easier to sell imo plus you have the extra room for storage if needed

silvercar

Lenders shouldn't have a problem with you taking a lodger. they do get iffy about you letting the property without living there yourself.

Sounds like it is good financial sense to buy a 2 bed and rent the second room. The only warning I would give is that you will have to compromise on something (size or location) to get a 2 bed for the price you are looking at for one beds. Make sure that you don't go to too grotty an area or too small a second bedroom as either will effect the let-ability and income from the second room.

Jowo_2

It may make financial sense to have a lodger, but think about the non-financial pressures, such as having to share a space with a virtual stranger, privacy issues, potential personality/domestic disputes and so on. Do you think you would enjoy the experience?

And why do you think this would only be for a year or two? Are you expecting a pay rise or something? Why is it going to be more affordable for you to live alone in the future?

I reckon you have to have a good think about money versus lifestyle.

JQ.

2 bedrooms every time. My first house was a 3 bed semi, when young free and single. I let out the 2 spare bedrooms which paid for the whole of the repayment mortgage, all I had to do was cover the bills. The mortage Co will be fine with lodgers as they gain no legal rights to the property as there is a live in landlord.

Also 2 bed flats are easier to sell when you do come to move later in life.

hazyjo

Know you won't want to hear it, but in your shoes I'd actually save for another year. Prices are still generally going in one direction. Then you'll have even less outgoings and would probably be able to save more than you would even with a lodger. Then the 2 bed is just yours from the outset - definitely a 2 bed, btw. Always easier to sell on, and if your circumstances did change, it's somewhere that could still work for you and a partner and even a child or two... In this market, think as long term as you possibly can. Also somewhere you or your partner could work from home, also, as you say, it gives you an option (now or in the future) of taking in a lodger if necessary.

Not sure if you're aware but if you do go for it now and find a lodger, that money won't affect what you can borrow.

Jx

cuthbert_the_octopus

2 bedroom...... as if you buy a 1 bed, then meet a special someone who later moves in, a 1 bed is too small (you will be living in each others pockets!), so will need to move again.

I know a couple of people I work with are currently in this situation.

In a 2 bed, there would be room for both you and a partner.

And in the mean time you can rent out the 2nd bed to help pay the mortgage.

taxsaver

As others have said, two bedroom is almost always the better investment being more flexible as your own home, easier to sell and providing an income opportunity.

You may not be aware but HMRC have a special arrangement for letting a room in your house to a lodger which allows you to earn up to £4,250 a year tax-free from a lodger. It is called the 'Rent a Room' scheme and a nice non technical description of this can be found here:

.direct.gov.uk/en/MoneyTaxAndBenefits/Taxes/TaxOnPropertyAndRentalIncome/DG_4017804 (Apparently as a 'new' user I'm not trusted to put a link for you!)

I hope this is helpful to you.

Marvel1

A 2 bedroom is better as the second can be used for storage.

My home is a 2 bedroom, but no way I would get lodger as I like my peace and quiet and being "selfish".

pinkshoes

Definitely go for a 2 bed, then get a lodger under the "rent a room" scheme. I don't know any mortgage company that has a problem with a lodger, and there's an option for lodgers on the contents insurance too.

To simplify things, it's often easier to work out roughly how much bills will be, then charge an "inclusive" monthly rate for a lodger, so you don't have to mess around splitting bills.