Let-to-buy

VfM4meplse

I'd like to get a let-to-buy mortgage to release the equity in my current property, which I own outright. Am guessing this is a specialist market as I don't seem able to access the same amount of unbiased info online as I would with a buy-to-let. Am wary of making the wrong choice through nativity!

Does anyone have any personal experience of LTB, or can offer pointers as to where to look? TIA

HappyMJ

VfM4meplse wrote: »

I'd like to get a let-to-buy mortgage to release the equity in my current property, which I own outright. Am guessing this is a specialist market as I don't seem able to access the same amount of unbiased info online as I would with a buy-to-let. Am wary of making the wrong choice through nativity!

Does anyone have any personal experience of LTB, or can offer pointers as to where to look? TIA

A broker would help you. There's plenty of choice out there.

Do you really want to get into property investment? With all the tax changes recently the government is trying to make potential LL's think twice about property investment. An extra 3% SDLT on purchase, only basic rate relief on interest charges as just a couple. That could not only wipe out your profit but leave you with a negative cash flow where you are paying out more than you are receiving in rent each month.

VfM4meplse

HappyMJ wrote: »

Do you really want to get into property investment?

Needs must, I'm afraid. The capital is needed to help me secure a new home, at this point in my life a mortgage is not an option - although it could be in future. LTB doesn't suffer stamp duty as the property doesn't change hands.

Eta: I'm in a similar situation to this: http://www.thisismoney.co.uk/money/mortgageshome/article-2914608/Are-moving-house-don-t-want-sell-try-let-buy.html . Again, an experienced independent broker is recommended, but I've been stung in the past.

AnotherJoe

VfM4meplse wrote: »

Needs must, I'm afraid. The capital is needed to help me secure a new home, at this point in my life a mortgage is not an option - although it could be in future. LTB doesn't suffer stamp duty as the property doesn't change hands.
.

You are certainly going to have a mortgage ! Essentially you'll have a buy to let mortgage. AFAICS Let to buy is just a term, you still end up with a BTL mortgage on the house you let the fact it was originally your sole and main residence is irrelevant

And stamp duty will certainly be due (with an extra 3%) on the house you buy to live in unless you aren't planning to buy but just use the money to rent though that's not the tenor or your post?

betmunch

Definitely speak to a broker, this area is not as simple as just picking a BTL remortgage.
A lot depends on what you want to do with the money and where you will live after.
Many lenders offer, but don't like this business, they think you're just trying to borrow on an interest only loan but not actually going to leave the property
Many of the problems with this type of loan are only known from experience, not published criteria

Typhoon2000

Some mortgage companies, like the Mortage works, have specific let 2 buy products with slightly higher rates than their Buy to Let range. But when your fix is finished you can transfer to their BTL range of products. As they are part of the Nationwide, they have a streamlined process if you are taking out a Residential Mortgage through Nationwide and a L2B through the Mortgage works at the same time. Both companies for good following products win easy product swictes at the moment. You need to go through a broker.

As you are introducing a mortgage free property into your bussiness the entire value of the property can be set against interest, not just the amount of L2B mortgage amount. So you can claim interest relief on some of your onward residential mortgage interest as well if you are taking up a mortgage ( up to the total value of your L2B property). Some mortgege companies will want you onward purchase to be equivalent or better than the place you are leaving. 3% extra stamp duty is a pain though, but it's less than years House price inflation and you can claim that as an expense when you sell.

[Deleted User]

Hi,

VfM4meplse wrote: »

Am wary of making the wrong choice through nativity!

apologies, but it gave me a laugh. :rotfl:

Maybe you should see a bank manger, oops. manager. :rotfl:

amnblog

This area is further complication as new EU rules coming in on Monday week make this case a regulated 'Consumer Buy to LET'.

Lenders will still be trialling their new application processes.

One for a broker only.

Also, it does sound like George will be putting his hands in our OPs pocket for an extra 3% SDLT on the purchase.

VfM4meplse

Thanks everyone, for your helpful advice. I had a tentative conversation with a specialist adviser a few weeks ago. One of the points that came up was the new rules for landlords and I was assured the stamp duty would not apply as I already own the property outright. I now realise that this is not something I can DIY easily, so I'll get back to him.

Nativity lol - we'll credit that laugh to Apple's autocorrect!

_CC_

VfM4meplse wrote: »

One of the points that came up was the new rules for landlords and I was assured the stamp duty would not apply as I already own the property outright.

You'll incur the stamp duty on your new (main) home if you're going down the LTB route i.e. letting out your existing home and buying a new one to be your main residence.

AnotherJoe

VfM4meplse wrote: »

I had a tentative conversation with a specialist adviser a few weeks ago. One of the points that came up was the new rules for landlords and I was assured the stamp duty would not apply as I already own the property outright.

Either you are badly misunderstanding the broker or your broker is an idiot, because when you buy another, second property (which is what seem to be planning is it not?) you most certainly wil pay the new higher stamp duty as you'll own two houses !!