Advice needed - to buy/rent/keep existing mortgage

cats_ahoy

Hi everyone,

This is my first post on here! (I know of this forum because my mum is a keen member )

My dilemma is:

My partner and I have a mortgage on a house in Nottingham (bought it for £86K in 2010) and I have just been offered a job near Reading.

We are fortunate that my partners job means he can move with me to Reading, but we do not know what is best with regards to our house in Nottingham. Ideally we would like to keep it and rent it out (We could probably break even on the mortgage repayments/landlord costs and money earned from renting it out, I've researched this)

We have around £9K in savings, and we would like to get a mortgage for a house near Reading eventually. I accept this probably won't be straight away.

Our dilemma is do we sell our house in Nottingham and put that equity (probably less than £10K as we had a small deposit) towards a house near Reading, or do we rent out our Nottingham house, and rent somewhere in Reading for a while and eventually buy?

I am aware house prices down south are a lot more expensive than in Nottingham, so we would need a fairly sizeable deposit for a house in Reading.

Any wise advice/thoughts would be appreciated.

Thanks, Cats Ahoy.

kingstreet

With so little equity in the property, have you established your lender will grant you consent to let and how much it might cost?

cats_ahoy

It costs £400 a year annual premium to rent the house out, and until we apply to rent it out we will not know what the decision is, but we have made some general enquiries into this question with our lender and the response seemed fairly positive.

G_M

New Landlords (information for new or prospective landlords)

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japmis

As tempting as it is to rent your place in Nottingham (and this might be the preferred option if you are ultimately planning on moving back there, especially if you have family ties) I think I would sell up and buy in/around Reading. £10k equity plus £9k savings would be enough to get a 90% LTV mortgage. I just hate the idea of renting (did it for 14 years). A house down south might appreciate quicker too than the house in Notts?

cats_ahoy

Thanks for all the advice so far!

We do have family ties in Nottingham, so I guess that is part of the reason we are thinking about keeping the house and renting it out.

I think I need to weigh up fully all our options before deciding on anything.

Guest101

cats_ahoy wrote: »

Thanks for all the advice so far!

We do have family ties in Nottingham, so I guess that is part of the reason we are thinking about keeping the house and renting it out.

I think I need to weigh up fully all our options before deciding on anything.

Just some basics if you rent:

This is your home, you maybe/are attached to it, but it will be someone else's home, can you accept that?

You will run a business, have you considered the tax implications, responsibities, read the laws and guidelines ( very complex in some cases).

Can you afford void periods?

You'd be surprised at how little you might end up making. If you do do it, come back ask for advice

cats_ahoy

Thanks for the reply Guest101, we could deal with it being someone elses home and not ours, we are just thinking in terms of actually having some equity (the house prices are so high down south compared to Nottingham), and the repayments on the mortgage are fairly low in comparison to what we would have to pay for a house down south.

I understand there is a high level of complexity with becoming a landlord, and we could afford the mortgage repayments on it if it wasn't occupied for periods of time.