Help appreciated - Trying to work out if this plan works (FTB)

Gorecki

Hi,

My partner and I rent in London (but can't afford to buy), and are trying to work out a way we could buy a house in the countryside (where we'd eventually like to live).

Current earnings: 50k each
Deposit saved: 20k each
Current monthly rent: 650 each
Current monthly savings: 800 each

We've found a 2/3 bed house (= 190k ish) in a town we know well and like and where my brother and his girlfriend currently rent.

We were thinking of buying it on a regular mortgage (but getting permission to rent it out), and rent it on an AST to my brother for about half the market rent (around £350 a month).

The idea being they can save for their own deposit, whilst we get great tenants and can still visit our house and see if we can move there in the future.

Does this sound like an ok plan or is there something I'm missing...

I was thinking their rent (- tax etc), would essentially cover our expenses (buildings, landlords insurance etc), and a bit of the interest but none of the repayment.

Therefore assuming (I know...) house prices stay relatively stable, essentially we'd be putting our savings into a house instead of a bank + helping out family + starting to own a house we like and could eventually move to.

I'd really appreciate it if you could give me your thoughts as to whether this plan is sort of ok, or you can spot any major problems (we'd obviously get our agreements written up in a contract to avoid any family problems/break ups etc).

Thanks :beer:

kingstreet

Your chances of obtaining consent to let immediately the mortgage starts are slim. Lenders don't like doing BTLs for first time buyers and it will be viewed as what you are doing.

Gorecki

Thanks very much, thought there would be a catch!
Do you know if it's likely to be slim or realistically no chance?

I thought as the loan would be against us rather than the property's rent return it might be easier to get one.

I've been given the number of a broker some of my friends have used before and have rated highly, do you think it makes sense I give them a ring before doing anything else then?