Help to Buy Guarantee Question

Flymatt

I might be missing something here or not explaining myself properly to the Banks that I've asked this question to but someone here might know....

I'm interested in the Government's Help to Buy Guarantee scheme, one of the rules on the website states that if you obtain a mortgage under this scheme you 'cannot let the property out to somebody else'. Therefore you must live in it and not buy-to-let.

I understand that bit and intend to do so, but in time (possibly in a few years) I may wish to move and keep that property as an investment and let it out.

Is this not possible under this scheme at all? If I did want to let it out, what would I have to do?

I've had varying answers from different banks ranging from a flat 'no' to 'yes you can but after a 6 months cooling off period' to 'nobody's ever asked me that question before - let me pass you onto someone else who still doesn't know the answer!' I find that hard to believe because it seems to be quite a fundamental question to ask before locking yourself into a mortgage that can never be used to let the property with.

Apologies if its a fairly straightforward answer, I'm a first time buyer with no experience in mortgages...

My immediate thinking would be that there would be a facility to obtain a permission to let after a certain period of time, or once a certain level of equity in the property has been reached? i.e. equal to the government's guarantee. But its not clear and nobody seems to know the answer!

Anyone here?

justcat

I would have thought that once your initial term 2/5 years of the mortgage is up you can remortgage provided you meet the LTV of a non mortgage guarantee product.

Obviously, if you are taking a 95% mortgage, you will need work out how long it will take to get down to the LTV that will fit the term of a buy to let product.

Hopefully someone more knowledgeable than me will come along soon!

kingstreet

It's seven years.

The guarantee expires after seven years, so you should be refused consent to let until then.

You can always remortgage to a formal BTL product once you have enough equity.