Buying with tenants in place

serious_saver

We have just viewed a property that we love. The only problem is that it's currently let until June 2012. Some prospective tenants have also just put a holding deposit down for the academic year up to June 2013.

We want to buy the house to live in. We're first time buyers and would need to get a mortgage.

I understand from the EA that the vendor has already turned down an offer on the basis that the buyer asked for vacant possession and the vendor is refusing to give notice to the tenants (I do understand the reasoning behind this i.e. he doesn't want to be out of pocket if the sale falls through.)

If we wanted to buy the property would we have to get a BTL mortgage and would we be able to switch to a residential mortgage shortly after buying? If we did what sort of fees could we expect to pay?

Has anyone on here successfully done this?

Conrad

For a buy to let mortgage you usualy need to already own a property and a deposit of 25% is also required.

Fees on buy to let mortgages can be substantial and if you switch to a residential deal within any incentive period (for example during the first year or two when you recieve a lower 'incentive' rate) you could be charged thousands in early repayment charges.

Not impossible, there may be a solution but it could involve putting in it a parents name or something.

Leon_W

I'd tell them where to go.

They either want to sell the property or they don't and it sounds like the vendor want's to have his cake and eat it.

If you're that keen then you could set a completion date for June to coincide with when the tenants contract ends.

Going down the BTL to Residential route sounds like a recipe for disaster with high fees, not only to set up but also huge to repay if an Early Repayment Charge is due.

DannyboyMidlands

I agree with Leon, offer on the basis of vacant possesion or tell them to shove it. They are the ones who have got into a situation where they can't afford to sell it vacant. Don't let it become your problem.

kingstreet

serious_saver wrote: »

Some prospective tenants have also just put a holding deposit down for the academic year up to June 2013

This appears suicidal on the part of the vendor if he really wants to sell.

Move on. It's a buyer's market.

serious_saver

Conrad wrote: »

For a buy to let mortgage you usualy need to already own a property and a deposit of 25% is also required.

Fees on buy to let mortgages can be substantial and if you switch to a residential deal within any incentive period (for example during the first year or two when you recieve a lower 'incentive' rate) you could be charged thousands in early repayment charges.

Not impossible, there may be a solution but it could involve putting in it a parents name or something.

Thank you. That is pretty much what I was worried could happen.

The deposit wouldn't be a problem but putting it in a parents name is not a option.

I think we'll just look at something else.

PaulLuke

The other reason I'd walk away from this is that if the current tenants decided not to leave when their tenancy expires the LL would have to spend time obtaining an eviction notice and enforcing it whcih would be somewhat problematic if you were trying to complete while that is happening.

Acutally TBH I'd run, rather than walk away from this scenario!!