Let to buy

lucie_1985

Does let to buy exist at all any more? I'm thinking ahead towards the future, we currently have a flat in London which we love and if at all possible when we move (inevitable at some point for secondary schools) will we be able to get a let to buy mortgage in order to buy a family home outside of London? Obviously no one can speak for the future but in today's terms would this be possible? I ask simply in terms of strategy in order to be able to keep the flat as a rental, i.e. do we overpay as much as possible and get mortgage free as soon as possible on the flat or divert those overpayments to a savings account so we have "real" cash to use as a deposit on a family home. Ta

betmunch

I did a couple of LTB's with different lenders just last month so they are definitely still available.


Whether or not they will be in the future is another question.


I certainly hope so

kingstreet

Yep. Remortgage flat for upto 75% of value, or whatever the estimated rent will support upto that.

Use the money raised to repay existing mortgage and for deposit on onward purchase.

get new residential mortgage from a lender which will ignore the LTB in he background as "self-financing" so it doesn't affect your affordability.

Pretty popular these days. We've done a couple in the last month.

ExpertAdvice

Hi,

Let to Buy is currently possible provided all the criteria fits in and as you said no one can predict the future.

Quite a few lenders offer LTB. However, not all the lender do so make sure to check before you decide to get one.

Also, just for your information, both LTB and residential mortgage dont need to be with the same lender. You can go with the lenders that would offer the best deal at that time.

Hope it helps.

lucie_1985

Fab, thanks guys, I just mentioned it in passing to family who were very wide eyed and said that that's a no go these days. Overpay it is then

lucie_1985

Presumably when the time comes broker is the way to go with that sort of thing? Especially considering going via two different lenders for the best deals on each mortgage?

kingstreet

Absolutely. Chances are two lenders will provide the different mortgages.

mlp

Am just about to complete in similar circumstances. Remortgage existing property (owned outright) onto a BTL product 63% LTV. Use the cash as a 43% deposit on new residential purchase.

The only condition is that the mortgages complete simultaneously as the BTL product stipulates you must be a residential home owner.

amnblog

These cases can get complex where the property to be let is the current home and the borrowers intend to let it only when they buy their new home.


Pick the wrong lender on the new home and you have a problem. Some of the Lenders want the previous property to have been let for a month, or sometimes six months, (one lender even says 3 years), before they can consider it 'self funding'. This kills the affordability calcuations.