House buying advice needed

saintsman

Hi All,

I was hoping someone might give me a bit of advice as after doing a lot of research on the internet I still find that I don't really know what to do.....

I am currently in the process of selling as property and I will have around 30k in my account after paying off all the relevant fees. I really want to invest this money in property again, but I am really unsure as to where or how.

My situation is this.... I am in the forces and married with one child and we live in service accommodation so I do not need to live in the house, so this is purely an investment for the future (I may look to sell in 5 years time). My thoughts are these...

1. Should I buy a house in london (I should be able to get a mortgage of around 230k) so places like Tottenham and Woolwich is where I was looking. I imagine that 230k over 25 years should be around £1100/month which i should receive in rent

2. Should i use the 30k to buy a house somewhere else. location (of which I am unsure of and not to fussed tbh)? house or flat? low mortgage of 70k or higher mortgage (and bigger house) 150k?

3. Could I, or is it worth spliting the 30k and buying 2 cheaper flats (15k per deposit) and rent them out. Would this be less risky than the london option?

4. What sort of mortgage should i be looking at, the houses would be bought and then let, but this could be the house we move into later, so i don't know if IT HAS TO BE a buy to let mortgage.

5. My wife currently has a flat (in her name from before we were together) so with the money from my property, should we buy a house purely in my name or jointly?

I am very new to all of this and I have no idea about where to start so any advice would be great,
Thanks

Phirefly

As your wife currently owns a property in her name you have to be careful about second property higher rate Stamp Duty. It is likely you will be liable for 3% extra stamp duty on the purchase of any additional property. To give you an idea of the figures, higher rate sdlt took our stamp duty bill from 12.5K to 26K...

You might not be liable to pay it/be able to claim a refund though if the house you are currently selling has been your primary residence within the past 3 years...

davidmcn

saintsman wrote: »

4. What sort of mortgage should i be looking at, the houses would be bought and then let, but this could be the house we move into later, so i don't know if IT HAS TO BE a buy to let mortgage.

Yes, it does. Lenders aren't going to give you a cheaper mortgage because you might move into it in the future - anybody could say that! You remortgage if and when you actually do move in.

danslenoir

Yes, you will need a buy to let mortgage, which typically requires a minimum 25-30% deposit.

Assuming that you will need to put away 5k for purchase-related outlays (solicitors fees, survey fees, landlord's license if your LA requires one, gas safety checks etc), that will mean your purchasing power is limited to around properties up to a value of 75k to 100k.

That is not going to go far anywhere in London or the South East, so I would forget about that immediately.