Where to buy mortgage in London or Toronto?

john84

Hi All,
We are aiming to move from London to Toronto in about next 12-18 months hopefully permanently. I have been saving up some money for the deposit, and after working in Canada for a year and building some credit history we will get our dream house on mortgage in Canada.
Currently we are living in a rented property in the UK. Due to property prices booming specially in London since last 1 year, rents have gone ridiculously high and its nonsense to pay such high rent especially when we have the money in the bank by which we can buy our own house on mortgage in the UK.

The dilemma is:
Seeing UK property market, I am tempted to invest in UK
Want to avoid insane rent currently I am paying,
Also I can put the property on rent when we go to Canada (which can continue generating some side income) or I can sell the house (but mayb wouldn’t give me any profit in short time).

Can someone advise if this is a wrong strategy?
Should I better carry on renting and bring all my saving to Canada than just buy a house there?
Or is it worthwhile to invest in the UK and live than let property on rent? Will that create any complication as the bought mortgage will be for “self-living” than I will be putting on rent after 12-18 months? Would bank allow me? Is it difficult for expats to manage mortgage/house in uk from abroad?

Thanks for your cooperation.

amnblog

Many owners who let their property do so via a letting agent who takes care of everything so you do not have to be here.

Expect to pay 10 to 12% of your rent for this service.

If you are not around it is worth considering new or newer properties where maintenance is likely to be minimum.

Remember that apartments will mean service charges and empty properties are still liable to council tax.

HappyMJ

Check with a mortgage broker. Make sure you tell them what you want to do. Some banks will not give you consent to let even after 12 months and you will be needing that or you will have to switch mortgages to one which allows you to let the property and if your income isn't secure then you might find it difficult finding a mortgage provider.

Also check with immigration and the tax authorities in Canada. Immigration might require to have the money as cash in the bank to get a residence permit rather than having the money invested in property (the UK authorities now require £62,500 cash in the bank or a decent income more than £18,600 to bring a spouse over here-the value of any property held is not counted...not sure what Canada requires). You might also find you have to pay more tax in Canada and the numbers might just don't add up any more.

Personally, if you have no intention of returning to the UK I wouldn't buy here. You would also have currency risk which you may want to hedge against and all that costs money which would make any investment not worth the effort.

Thrugelmir

If you move abroad permanently. Do you really want the hassle of owning a property thousands of miles away? Not as if you can pop round when there's issues that need addressing.

john84

Thanks for your reply.

Yes I agree its hassle and risky, they only reason I got tempted due to the current house market, plus I have been living and working in uk so I can easily have mortgage approved and invest something here.
I have been living on rent since many years, and hardly seen my landlord as most of them were expats. So just thought mayb I should avail the opportunity and invest here when I am going to be an expat soon.
If I dont invest now, means my money sits in bank ideal for next 18months + 18 months in Canada (as when I will land there will take me at least 18months to explore, find better job, and building credit history)...so means for next 36 months my money sitting ideal in bank and not earning me anything.

is it really tough after 12 months to let property?
should I go to broker or bank directly? as my mate told me just visit few banks directly and see what they offer you instead spending money on brokers..wat u suggest?

amnblog

john84 wrote:

is it really tough after 12 months to let property?
should I go to broker or bank directly? as my mate told me just visit few banks directly and see what they offer you instead spending money on brokers..wat u suggest?

Your mate is suggesting the 'cheap' approach and you may well get you money's worth if you go direct.

happylucky

OP, re your comment on having expat landlords, this was possibly related to:

1) former cgt exemptions for non-res landlords Which are to be abolished from April;

2) full personal allowance claimable for non-res landlords, under threat still although given a temporary stay of execution;

3) historical capital appreciation in London. All data suggests this is declining and even reversing now in parts of London depending on your price bracket. Next lot of land registry data (tomorrow i think? ) should make interesting reading and give you a more definitive answer on this. Other parts of UK are expected to fare better from investment perspective.

Good luck with whatever you decide!