First Buy loan and renting out

dysucker

Hi All,

Firstly, apologies if this is in the wrong place, it seemed like the most appropriate place to post this request.

My partner wishes to take all the money she has saved and make it do something better for her, so she's considering buying a house.

She's found out about the First Buy scheme, and it looks like a good opportunity for her to purchase her own place.

However, she is considering then renting the house out on the open market. I've advised her that she would need to at least either seek approval from the mortgage lender, or seek the appropriate Buy-To-Let mortgage.

But I have not found out anything about the First Buy scheme loan with this regard, it mentions repayment after 5 years, and other ways of repaying, but I cannot seem to find any stipulation regarding the use of the property after it has been purchased.

My assumption would be that there would be some kind of covenant placed on the property when the loan is taken, but obviously, without having any information to this regard, its all hearsay!

I hope that you guys have better experience on this than I, or can at least show me where I can find out more information about whether this is possible.

Cheers!

Luke

Thrugelmir

You'll need to own the property for a minimum of 6 months before applying the lender for consent to let. This is only granted on a temporary basis. There's no guarantee of this being granted. Also the lender can levy additional charges and an interest premium for the priviledge.

Not being an existing home owner will restrict the number of options available to obtain a BTL mortgage.

LauraWxx

I have a first buy property and plan to rent it out in a couple of years, however the first buy element (20% of purchase price) has to be paid off before renting the property.

Hope that helps