Any suggestions?

EGGP1878

I'd really appreciate some advice.

My Fianc!e and I own a city centre apartment which we've had for 18 months.

We're currently on a 2 year fix with 18 months remaining with HSBC, we owe £160k and have 24.5 years remaining overall.

We had the apartment valued when remortgaging in January, HSBC only valued it at £200k. At the time we had it valued ourselves by an estate agent and they valued it at £225k.

We've just had it valued by a different estate agent for £230k.

We want to borrow £30k out of the apartment, rent the apartment out and use the £30k to buy another house which we will live in.

However, as HSBC only valued it in January at £200k and we still have 18 months remaining on our fix, what are our options?

The LTV wouldn't be high enough to borrow £30k based on the January valuation, would they revalue it? We're not being realistic with the £230k valuation as 2 have recently sold for £220k which are smaller.

Any suggestions? If we sold the apartment we would have around £70k to put towards the house but we want to keep hold of it to rent it out if possible.

Thanks

ACG

I would be surprised if HSBC would allow you to release £30k and then let it out.
Likewise I am not sure you would be able to put it on a BTL as they tend to go to around 75-80% LTV.

I would also take a read up on the BTL tax changes coming in over the next couple of years. Added to the fact that if you keep the current property and purchase a new one, you will have to pay a higher rate of stamp duty as it would be classed as a second property.

Thrugelmir

You don't appear to have sufficient equity to switch to a BTL mortgage. That's if HSBC will agree to the request let alone release the equity as well.

How much are hoping to borrow to fund the next property? As an existing £190k of debt will have an impact.

EGGP1878

Thanks for the replies.

I've just realised that the 2nd home I wanted to purchase would now cost £14k stamp duty due to the recent changes. So basically what they're saying is 'you're only allowed one property now'. No chance not paying that. I'll just sell & buy.

Thanks anyway!

elverson

More like they're trying to make buy-to-let less attractive (with the additional stamp duty) and thus increase wider home ownership by creating more FTBs. This policy appears to be working in your case.

Did you really want to take on all the responsibilities of a landlord anyway?