Would this be a Buy-To-Let or second home?

krishijones

We have a mortgage for a home we currently live in. Our son is at uni and we are thinking to buy a flat on mortgage so he can stay there with 2 other friends (more for ease, than earning money!)...

would this be classed as Buy To Let or just a second home...asking this coz its our son who will be living there primarily..with his friends as lodgers...our son would not be paying us anything (don't want anything off him really, but his friends will be paying minimal amount)

Goldiegirl

As it's going to be occupied by a member of the family, it sounds like a second home to me

holly_hobby

This would actually be classed as a regulated buy to let if more than 40% is occupied by a family member - there is however possibly a more suitable scheme ran directly to assist parents in your situ (ie wishing to home a child at Uni), and also considers rental income from fellow students residing with your Son - which may help with affordability.

Its offered by Bath B Society - here's the link that I hope will assist ..
http://www.buyforuni.co.uk/

Hope this helps

Holly

krishijones

You sound right there...it seems like a regulated BTL..
But I can't go for the Bath B Society one as its only offered in England and Wales, but my son is in Scotland :-(

Which banks normally offer a regulated BTL for a property in scotland? any idea? :mad:

holly_hobby wrote: »

This would actually be classed as a regulated buy to let if more than 40% is occupied by a family member - there is however possibly a more suitable scheme ran directly to assist parents in your situ (ie wishing to home a child at Uni), and also considers rental income from fellow students residing with your Son - which may help with affordability.

Its offered by Bath B Society - here's the link that I hope will assist ..


Hope this helps

Holly

holly_hobby

Thats a pity ... it would have been helpful to have included you were in Scotland in the original post due to the geographical restrictions lenders have.

Sorry I'm based in England so don't know of any similar schemes for your neck of the woods.

Regulated BTLs are available with various lenders (usually assessed under 2nd property criteria, but may differ as there will be additional rental income from 3rd parties, you are also looking for a lender who is happy with a student let).

Given the dynaimics of your enquiry, you really need to sit with a broker to walk you through the whole process, which conveyencing wise is slightly different as you know

Hope this helps

Holly

jennifernil

Depending on where the property would be, you could be getting into HMO territory with 3 unrelated occupants.

If you were to buy the property in your son's name, if you could get him a guarantor mortgage, it would then be owner plus 2 lodgers, which is slightly different. The amount he could borrow would depend on your income and present mortgage.

The lodgers would pay rent to your son and he would use this for the mortgage payment. You would need to find any shortfall.

The rents would then form part of his income for tax purposes, and he could use the "rent a room" scheme.

I can understand you paying to house your son, but why would the friends only pay a minimal amount? They should pay the going rate!

What plans do you have for the property afterwards? It will of course legally belong to your son.