Changing to BTL with little or no equity

timsmith2

Hi,

I'd like to get people's ideas on my options.

I was a first time buyer in 2007 with a 20% deposit. My flat is in Bristol. A year later property prices crashed and my career also took me to London. I let the property and did not inform my lender (I understand the risks with this so please no lectures).

Now, I have moved back to the west country but my new job is not in Bristol so I cannot move back into my flat and I do not want to sell it as its value still hasn't recovered, in fact it is probably only valued at the same amount as the mortgage borrowed against it. I have a decent amount of money in savings which I hope to use as a deposit on another flat closer to where I am now working. I earn in the mid 30s, and my mortgage is £450pcm which is also what I take in rent. My mortgage is with the Halifax. I have never even come close to missing a payment and have no other debts.

What I'm hoping people will be able to tell me is will I be able to convert my current residential mortgage to a BTL even though I have no equity in the property?

Or, if people think I have any other options please let me know.

Thanks,

Tim.

ch3101

You'll not be ale to remortgage on a by to let with 100%LTV. Best thing would be to speak with Halifax and arrange consent to let, hopefully they'll be okay with that.

Thrugelmir

timsmith2 wrote: »

What I'm hoping people will be able to tell me is will I be able to convert my current residential mortgage to a BTL even though I have no equity in the property?

With insufficient equity there's no possibility.

Majority of lenders also require the borrower to own a residential property.

So you may need to rethink your plans.

simpywimpy

Just get permission to let as mentioned above. You need approx 25% equity for a BTL at the moment

timsmith2

Thank you all very much for your replies. I thought as much as what you've all said but wanted to check.

I appreciate this may be like looking into a crystal ball, but would getting consent to let be fairly straight forward considering my record and current circumstances? In my mind it makes more sense for the bank to let someone do that rather than expect them to pay their mortgage and the rent near where they work which makes it harder for them to keep up repayments. I'm sure many people are in the same position. But I'm never certain banks use the same logic as the rest of us.

Thanks,

Tim.