Parents are in and I need to move out?

Damian_P

My first post so hopefully all will go well ;-)
I have been to my bank, a big brand advisor and an independent advisor (i think) and I have a collection of info, some of which is conflicting.
Here is my position:
My Mum and partner (long term) needed to move back up to my home town where they had sold up to go rent down south (Im in Scotland). There plan was to rent somewhere until the money is gone. Initially I was going to move in with a GF so I thought it would be fairly straight forward to rent out to them. I was all set for a 'consent to let' with RBS and things quickly did not work out with the GF.
I also learned over the time that I unknowingly have put myself in the 3 percent stamp duty category.
I am now back at my home, squeezed up with the parents. I need to find somewhere fairly soon.
The problem lies with not being able to buy to let to my parent(s) which will then give me the equity from my home for a better deal on buying a new property.
There is a little twist here though. I have a 90k property with 49k left on the mortgage. My parent(s) have a little over that amount and are willing to pay the mortgage off instead of paying rent. I worked it out that they would have paid 49k over 8.5 years and this would save me in the long term regarding interest. This also allows me to borrow what I am allowed without having to consider that 49k while having two mortgages.
Problem is that I will then have a poor LTV on any further property, still need to pay the 3% and I will need time to save the deposit (getting there but not there yet). My monthly outgoings will be very high where as if I was able to buy to let, I would have that income with profit to balance things out. I know this would be short term pain and long term gain but I need to be able to afford it.
My parent(s) are willing to do whatever it takes but I would prefer to move on from this house.
I know I can sell and make them move but this would be my last option. I also know I could rent in the short term to give me more time.
An option my parent(s) put forward was too reduce the rent and take 25k for a deposit. One advisor told me that I would be able to rent to my parents but would need to prove rental income to be at least £120 a month in profit.
I just feel that having 50k at my disposal (which would go to waste if they rented somewhere else) and ideal tenants, I might be missing a trick here?
Any thoughts?

Pixie5740

If you're in Scotland it's LLBT, not SDLT.

I'm a bit confused by the set up. Do you own the property that you and your parents live in? If so then isn't the easiest solution for you to remain in your home and for your parents to move out either buying their own place or renting somewhere?

TBagpuss

Would one option be for you to sell the property to your parents and take a charge (private mortgage) over it for the £41K they don't have? They would nw the house subject to a mortgage to you (you could then decide whether it's on the basis that they repay you a % ofthe house value when it is sold, or whether they pay it off over time like a normal mortgage)

You then have no borrowing of your own against that property which may make it easier for you to get a mortgage elsewhere. It doesn't give you a cash lump sum, and you would need to to check the tax implications, but it avoids you paying the extra 2nd home tax and means that you are not a landlord, with all the obligations which that carries.