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Why can't I get a buy-to-let?

Hi there, my friend and I would like to buy an investment property and have all the money we need for a deposit, but the banks will not give us a mortgage. I was wondering if anyone has a solution / way around this at all? Admittedly we are in a unique position so it is understandable we cannot get one, but any help would be greatly appreciated!

The details:

- We would like to buy a property to let out in Essex, for £60,000 - £100,000, for a 50 /50 share
- We have a deposit of around £28,000 between us. I earn £28,500 pa, my friend is self employed and earns roughly the same.
- We both currently live at home with parents (both 23 years old), however I am about to move to London to be closer to my job. I will be renting a place in London as I cannot afford to buy / don't really think buying a house in London is a great idea at the moment. My friend works round the corner from his parents' home so it's not really necessary for him to move right now
- We are not allowed a mortgage based on the fact we do not own our primary residence. The banks think we will get an interest only mortgage and then live in the property instead of letting it out, which some people have been found to do.
- I am not fussed about owning my own property right now as that isn't really viable in London, but I do want to build up a buy-to-let portfolio if I can. Having a tenant in a property I own and renting another for myself to live in is effectively the same as living in a property I own finance-wise, as either way I own a property which is having it's mortgage paid off.

If anyone can come up with a solution this would be great. We've considered P2P lending, but it doesn't seem like there are long term options for this. We have also thought about whether we could create a company and get a mortgage through the business, but we're not sure on the technicalities behind this.

Any help greatly appreciated!

Thanks,

Josh

Comments

  • Thrugelmir
    Thrugelmir Posts: 89,546 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    Not sure what's unique about your situation. Consult a broker. As many lenders do require borrowers to own another residential property.
  • amnblog
    amnblog Posts: 12,769 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    Your main issue seems to be that you do not currently own a property.


    Yet this phrase is confusing '£60,000 - £100,000, for a 50 /50 share' - what do you mean by this?


    We don't know which Lender you have been to but I suspect it was not one of the two I know of that would consider such a case.
    I am a Mortgage Broker

    You should note that this site doesn't check my status as a Mortgage Broker, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.
  • JJHS91
    JJHS91 Posts: 2 Newbie
    Hi amnblog, to answer your first question - I meant we would have a 50% stake each in the house (nothing complicated), and that the value of the house we are looking for would be between 60-100k.

    Could you recommend who I should be speaking to please?
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