Let to buy?

Cerulean

We have been considering selling our house to buy something bigger, but have discovered that houses in our area are prime student lets. Looking at the figures our house would let for approx £1200 a month. The market value of the house is £240,000, our current mortgage is about £560 a month with 17 years left to run and a current balance of approx £77,000.

I think the figures look promising but could anyone advise us how we would go about this and how much we could afford for another house as without releasing the equity we would have no deposit to put towards it.

Cheers.

Mr_helpful

You remortgage your existing house raising the deposit for the new one if you need to and then just purchase the new one as if you were a buyer with nothing to sell. you can go up to 95% but beware some companies though not all have higher lending fees.

herbiesjp

Don't forget to get consent to let from your current lender

lic

Some years ago now, I did exactly this. I obtained permission from by lender and let the house out for a period of years.
However, now there are mortgages available for this type of demand; renting to students might not be allowed though!
If you do rent it, as it was you main residence, you do not have to pay any Capital Gains Tax if you decide to sell it in within the first 3 years.
Obtain the largest amount of mortgage possible on the' let to buy' property, thereby giving yourself a bigger deposit on your new home. This way not only do you pay less tax on the income from you 'let to buy' property, but also reduse the amount of mortgage interest you pay on your new home. It like a double whammy tax saving.
Hope it all works out for you.