Buying a second house..... advice pls

Timmne

Morning all.....

Wondered if anyone would be able to advise me on this please?

My lovely lady and I are going to need to move out of our city centre apartment (I know i know, it's really a flat) soon to make room for a household on the brink of getting bigger than the two of us!

The problem I'm having though is the place we own is so amazing, there are very few other flats like it around us, and certainly nothing with the spec that ours has for the price we bought it last year.

SO - my plan is initially to rent our place out so we still own it, and then rent a house for us to live in elsewhere. I then thought that after a certain amount of time our flat must be seen as a self-sufficient income to a mortgage lender mustn't it? - I.e. we can then borrow on another house if the flat is paying for itself....

Does this sound feasible, and if so how long would we need to rent our place out for?

Cheers happy people!!

benood

I'm not an expert but effectively you will have a BTL mortgage on the flat so I don't think that multiples would apply - have a chat with a mortgage broker about the options

HugoSP

HMRC will allow you to deduct the costs of maintaining a loan to facilitate the property that you rent out.

Hence - and this is where a tax accountant would help - a mortgage taken out to buy the flat would benefit from its interest payments being 100% tax deductable. Property investors try to max the loans on houses they rent out to push most if not all their own mortgages onto them.

Also, there are rules concerning Captial Gains Tax on 2nd homes. This is all about which you declair as your principle primary residence (PPR) Again a tax accountant should be able to advise but IIRC your flat should be exempt from CGT if it is sold within a period of 3 years from you having lived in it. Hence you may be better served renting it out for a couple of years then selling it and taking the profit to date, rather than keeping it longer, and getting less for it after tax.