Buying house with student son

Statto

My son is at uni in nottingham and I am investigating buying a house near the uni for him to live in and to let to other students.

A four bedroomed house costing around £150k should generate around £1200 per month whilst the mortgage repayments on £120k (assuming 20% deposit) would be around £500 pm.

I would put up the deposit and want to put the house in his name to avoid tax issues for myself.

I will be happy to stand as guarantor for him. He has regular pub work to supplement his student loans/grants.

Advice required on route to take - am I likely to get mortgage direct from lenders or should I go to brokers. Is it necessary for him to have substantial income to get a buy to let mortgage? Has anyone done anything similar and anticipate pitfalls?

Regards
Jim

Suarez

Does he earn £30,000 a year?

rising_from_the_ashes

I know a few people who've done something similar but the house/mortgage has always beein in their name with the income enabling the mortgage to be paid & their child to live rent free (to avoid building up big debts).

I think your son may struggle to get a mortgage for that amount, even with you acting as guarantor as a) his income is unlikely to generate the sufficient income multiple and b) I assume he's still quite young and is unlikely to have built up enough of a credit history to "comfort" lenders.

One of the mortgage advisers on here should be around shortly and able to advise more.

Annisele

Unless your son has exceptionally well paid bar work, I'd be surprised if he can get a mortgage in his sole name.

Presumably this would be an HMO if it was in your name - I'm not sure whether it still would be if it was in your son's.

Crops_and_croppers

Hi, we own some student houses.

Unlikely that your son would get a mortgage, as he would need to prove his income.

There are some good tax breaks if you buy a HMO, you can claim capital allowances. (you'll probably need a specialist tax advisor for this, most accountants not clued up)
But this can be appx 10% of the purchase cost of the property, so they will reclaim against tax you pay as an employee or self-employed.

We have just had a claim for £26K worth, the tax advisor charged me 5%.

Go to a mortgage broker as you'll need a buy to let mortgage for a HMO, and not all lenders offer these.

If you want any advice about the houses, PM me.

tbs624

Crops_and_croppers wrote: »

If you want any advice about the houses, PM me.

Its thoughtful of Crops to offer but the OP should bear in mind that one of Crop's posts in another thread suggests that their knowledge of LLs and contracts is inot up to par.