Buy to let with no income

Foxy-Stoat_3

Voyager2002 wrote: »

You have not considered the simplest solution: ask your current lender for 'consent to let'. That can often be done without evidence of income. Of course, you would still face the problem that your mortgage payment plus costs would be more than your income...

For the lender to consider consent to let the rental income should be £1625 upwards.

What is the current equity and can you not just sell the property?

Svenisafool

Consent to let is a non-starter for the reason you suspected - the outgoings would be more than the income.


Foxy-Stoat - The equity is quite high (value £450k, outstanding £250k) but I don't really want to sell as it'll be tough to get back on the ladder where I live.


As an aside, I did understand correctly that a lender wouldn't lend without me having an income to supplement the rental income. The obvious solution is to get a job but lenders require the employment to be full time, permanent and for a period of at least three months before they will consider lending.


On your point regarding the equality when adding a person to the deeds. It is possible to add a person as a Tenant in Common and specify that their share in the property is 1%, thereby limiting the tax implications etc. I do understand it wouldn't limit their liability for the mortgage, which would be J&S.

Foxy-Stoat_3

If consent to let is a non-starter then there is little point in trying to get someone else on the mortgage, unless you are planning on staying where you are and getting lodgers in.

Not sure if its possible for someone to be accepted by the lender as having a financial interest in property at that level and still be a viable customer and i am sure HMRC would not see it the same way either should you let it out.

If you cannot afford the mortgage then selling it is a realistic alternative and having £200,000 cash in investments isn't a bad place to be if you wanted to re-enter the market at a later date, as long as house prices don't sky rocket in your area in a few years.

You would be able to sleep very well at night knowing you haven't got to worry about Landlord insurance, paying the mortgage should tenants not pay for any reason or you have void periods, and not paying for essential repairs should they be needed and doing tax returns every year and paying income tax.

R34GTT

Why can't you get consent to let? I had it a few years back and no proof of rental income was required by the lender, in fact I merely stated I was thinking about letting and that I would rather have it just in case I decide to go ahead.

Foxy-Stoat_3

R34GTT wrote: »

Why can't you get consent to let? I had it a few years back and no proof of rental income was required by the lender, in fact I merely stated I was thinking about letting and that I would rather have it just in case I decide to go ahead.

Mortgage is £1300 and rental income will be £1400, which won't be enough.

R34GTT

Foxy-Stoat wrote: »

Mortgage is £1300 and rental income will be £1400, which won't be enough.

But if the lender does not care, then as long as the income covers the mortgage payment it will be OK. Presumably the OP is planning on earning again in the near future so any additional costs down the line should be manageable.

Foxy-Stoat_3

R34GTT wrote: »

But if the lender does not care, then as long as the income covers the mortgage payment it will be OK. Presumably the OP is planning on earning again in the near future so any additional costs down the line should be manageable.

Problem solved then.

I would think carefully before becoming a Landlord with no income though.

R34GTT

Foxy-Stoat wrote: »

Problem solved then.

I would think carefully before becoming a Landlord with no income though.

It's not ideal at all, I agree but in the OP's position this seems like the most straightforward thing to do, especially with the added financial security of being able to live at the parental home. Also, given the spare time available, managing the property themselves would be the cost effective thing to do at least until employment is found.

HappyMJ

Something to consider if you don't live in the house you will not get any benefits at all due to having too much capital. If you do live in the house the value of it is ignored for benefit purposes and you can get JSA, council tax reductions and can even have some income from lodgers.