Mortgage/letting our flat short term

LadyN

Hi all, I'm hoping someone can help me with a mortgage question... My fianc! and I are looking for our first home and although we won't be ready to move in until after our wedding in a years time, we would like to buy soon if the right place turns up.
If we buy a place soon we would like to let it for a year before moving in ourselves, so my question is do we need a special buy to let mortgage and will we then have to change it when we move in ourselves?
Thanks!
C

steve1980

If you buy a place then let it out you will need a buy to let mortgage which requires a bigger deposit.

ognum

Can one or both of you move in to save getting a buy to let mortgage. You do know that the flat may not be available to you exactly when you want it don't you. There is not guarantee that your tenants will move out when you want them too, is it worth the stress.

you will also need, landlord insurance, gas safety checks etc etc is it worth it for a year?

Beckyy

As above, yes.

Where are you living now?

Is there any reason why you would like to buy a house but not live in? I would imagine that you are paying rent of some sort now, and to have that and mortgage and costs of being a landlord will all mount up!

If you can afford a house now then I would buy in it and live in it, or wait until you can.

ognum

Also remember you will need to self assess for tax, you can only offset the interest part of the mortgage against tax you may not find you make enough money to make it worth it for a year.

First year of renting a property often work out as profit neutral!

HappyMJ

ognum wrote: »

Also remember you will need to self assess for tax, you can only offset the interest part of the mortgage against tax you may not find you make enough money to make it worth it for a year.

First year of renting a property often work out as profit neutral!

If that...at a higher interest rate, remortgage fees back to an owner occupier mortgage I doubt there would be any profit at all for quite a while. Investment in BTL's is supposed to be long term where the real profit is made from the capital gain of the underlying property. The tenants basically pay the rent so the landlord can pay the mortgage, any maintenance and insurance required and provide a small return on the equity stake they have initially put down on the property.

For the hassle if I had a spare £50,000 to put down on a £200,000 property portfolio I'd rather just put my £50,000 in the bank and earn 3% interest. So much less hassle. At least I wouldn't need to ensure gas safety certificates, insurance on the money or inspect the premises each year and finding new tenants every few years.

DannyboyMidlands

Why not just wait until you are ready to actually move?

kingstreet

Are either of you a member of the Armed Forces?

Werdnal

If you are buying with the intention to let it out straight away, you will need a BTL mortgage. Higher deposit, higher payments and you will not be able to them live in it yourself until you convert back to a residential mortgage. You also need LL based house insurance, and must complete tax returns for your rental income every year. Only certain costs are allowed against any tax you must pay, so depending on how much rent you charge, you may not even cover your mortgage.

TBH, the hassle and legal obligations of letting - read this:

http://forums.moneysavingexpert.com/showpost.php?p=41160642&postcount=12

may not be worth it.

Save your money until you are ready to buy, rather than get tenants in who may damage the property, stop paying rent, or refuse to move out without costly eviction process when you do want the place to live in yourself.

Incidentally, you may not even be able to let a flat, as some insist on owner occupier only!

LadyN

Thanks for your advice everyone!

We're first time buyers and a bit clueless about all this.

At the moment neither of us is paying rent, so we thought that letting a place out would cover the mortgage repayments for the first year and even make us a bit of money.

On second thoughts, it does seem like a lot of hassle and we'll probably be better off continuing to save and looking for somewhere to buy nearer the time.