First time buyer - letting for a couple of years?

shera_

Hello,

I recently came into some inheritance money and now have a deposit for a home back in Scotland. Unfortunately, my fiance and I currently rent and live in London as he is studying for a doctorate, which will be finished in two years.

I feel like I can secure a good price on a property right now and I'm worried by the time we look at buying again the prices will all be recovering. However, I am thinking of letting my brother live in the property as long as he pays me the money to cover the mortgage.

Basically, I'm wondering if I would be able to get a first time buyer mortgage and then straight away apply to change it for a set period or would I have to go straight to buy to let (which I don't have the huge deposit for) even though its a family member who I know is good for it.

Thanks for the help! I'm very desperate to get on the ladder as I've never had this opportunity before!

Yorkie1

You will have to get a buy to let as your intention is to let it out from the start. To do otherwise (i.e. get a residential mortgage) is mortgage fraud.

Even ignoring this point, I doubt any lender will consider an application to change within 6 months - but even at that point they are likely to be suspicious, particularly as you wouldn't be on the electoral role at the new address or have any correspondence address there.

You will also need to do all the Landlord stuff by the book, including registration as one. The fact you are letting to family does not remove this need.

Finally, you are overlooking the much-emphasised advice on here which is NEVER let to friends or family. Would you be prepared to evict them if need be?

Edit: This is not the way onto the property ladder. And in most areas of the country, property prices are not rising at such a high rate as to price you out of the market - unlike London. Are you really sure they are rising that fast in Scotland, or are you just being affected by London panic?

Finally, finally (!). Can you be absolutely sure that you will want to return to the place you wish to buy, once your fiance has completed his Doctorate? What happens if the jobs are elsewhere?

Double edit: Where is the inheritance invested at present? I assume it's what you refer to in your other post, from last July?
https://forums.moneysavingexpert.com/discussion/comment/54403203#Comment_54403203

At that point you didn't envisage touching the money for 5-7 years. Do you have it in cash or did you invest in the stock market? If the latter, do you know its value now?

shera_

Ha, I've seen this question a lot, but too right I'd evict him!

Pretty much what I thought. I'm completely happy doing all the legal stuff, just think the banks don't even want to know about individual circumstances. I'm not being a scumbag landlord, I want to live in the flat after two years! Ah well.

shera_

Yeah - with regards to coming back to Scotland, its going to happen, especially cause we are wanting kids and the crazy childcare costs in London. He will get work and I'm a nurse so if I don't get something I like, I'll get *something* regardless.

I think you're right with the 'London panic' is scaring me the prices and I grudge the rent alone we are paying. Especially when I look that I can be paying almost a third of what I currently pay on rent onto a mortgage for a property I'll eventually own.

Regarding my money - I put what I could in an ISA, but the rest is still sitting in cash. Doing nothing. I don't trust myself with it sitting there when times are tight.

G_M

Yorkie's advice as usual is sound.

shera_ wrote: »

Ha, I've seen this question a lot, but too right I'd evict him!
You say that, but when it came to it, would/could you make him homeless? On top of him just being made redundant or whatever?

Since you are seeing this as an investment I'd strongly advise being professional about it - no family. But your choice of course.
Pretty much what I thought. I'm completely happy doing all the legal stuff, just think the banks don't even want to know about individual circumstances. I'm not being a scumbag landlord, I want to live in the flat after two years! Ah well.

Yes but the 'individual circumstance' is that you are investing your cash to get a return (ie getting on the property ladder before "the prices will all be recovering". You are NOT buying now to give yourself a home.

This post will give some more tips - it is England/Wales biaised, but many tips are common to Scotland. Note in Scotland LLs must regiater with the council.

Don't forget tax on the rental income!