Buying a house for us, which is rented out for another 6 months. Possible?

andre_xs

Dear All,
we are first-time buyers and not very familiar with the UK system (moved here two years ago and were renting so far).

We've seen a property which is for sale. We would like to purchase it to move in ourselves. However, it turned out that there will be a tenant moving in on 1st of Sept for 6 months. Thus, it would be a "buy-to-let" for the first 6 months, but then we'd move in ourselves.

We really have to stretch ourselves to be able to fincance it (take up max morgage available, parents will contribute to provide min required deposit). However, it would just be within our budget. So far we had only one initial consultation with HSBC to get an idea how much money they would lend. Maybe other lenders would give a bit more, I don't know.

However, my question is basically whether mortgage lenders would agree to such a deal at all. We could probably get together the additional money we'd need to cover the difference between rent and mortgage rate (rent is lower than what we'll have to pay for the mortgage each month). I think the rent is 1100 (for the tenant, potentially minus taxes, insurances, etc), and we expect our mortgage to be around 1450pcm. Of course we also will have to pay rent for our current place until we can move in...

We really love the property, and it is actually a rare opportunity to find something which is suitable for us in our area at all (and which we can finance). First one within a couple of months... (Unfortunately, we have some special needs which make it harder to find suitable properties).

Any comments, tips, etc. greatly appreciated!

Many thanks in advance &
Kind Regards,
Andre

chanz4

Broker only with this one, cant see hsbc going for it

-taff

You'll have to satisfy the requirments for a buy to let mortgage, with your current income taken into consideration.
BTL mortagese require a higher deposit than a mortgage based on living in the property.

mrginge

Likely to be a complete non-starter.
Why not just buy it in six months?

mrginge

..oh and do these new tenants know they'll be kicked out after six months?

Slithery

What makes you think that the tenants will only be there for 6 months?

alchemist.1

I would worry about not being able to get rid of the tenants quickly (after the initial six month period).
You will need to look into a Buy to Let mortgage. Considering that you are pushing yourself to the maximum for the residential mortgage you may have some problems.

G_M

Do you really want to be a landlord? Do you know what's involved?

* New landlords: advice, information & links

andre_xs

Hi,
thanks for all the answers.
- No, we don't want to be landlords. We want to live in the property.
- The estate agent told us that the tenancy is only for 6 months. I presumed it is a fixed tencancy contract without option to extend.

What I heard, the history of the sale is as follows (as told by the EA):
- Owner rented out the property, I think he never lived there
- Owner wanted to sell
- A sale was near to completion, but the buyer bailed out and bought something else
- For some reason (maybe it had already been taken too long, I don't know), the owner let the property again for 6 months, but the house is still on the market. *Not* signed as buy-to-let.

I'll speak to the EA today to ask more details about the tenancy agreement. I think I'll ask for an (anonymised) copy of the tenancy contract. Then we can be sure how it is worded.

Again, thanks for all your input. Would be a pitty if this property is out of the game, but better safe than sorry...

Kind Regards,
Andre

elsien

Could you afford the extra costs if the tenant stopped paying the rent/refused to leave at the end of the 6 months and you had to go to court to get them out/ trashed the place?

andre_xs

Yes, we also considered buying only after the 6 months. Given that the tenancy starts already in September, and we haven't even made an offer yet, I guess it would result only in a delay of 3-4 months max anyway.

However, the owner will then most likely keep it on the market (why shouldn't he), and given the market in our area, I don't think it will still be available for that price in 6 months. Most likely it will have been sold then.

Are there any ways of having a pre-contract? Like fixing everything now, but the owner owns it until the tenancy is over. Then there will be just the exchange of contracts. Problems I see with this: How can one make it binding for both sides? In addition, *we* actually might want to bail out of the contract in 6 months (e.g. if the tenant totally ruins the property).

Best,
Andre