BTL mortgage on 1st (only) property

fru-girl

Hi, I'm looking to potentially move in about 2 years or so - when my child will go to secondary school. We live in an expensive SW London suburb and I own a 2-br flat. There are many reasons for wanting to move, one of them would be to live in a house, not in a flat, the other ones would be that my current work commute is too long, current secondary school not good enough, etc. So the plan is to move to be closer to work but also close to a great secondary school.

Now, I have two choices: either sell and try to buy something else OR (the 2nd option that I prefer) rent out my flat and find something for rent in a different area. LTV is approx 50% at the moment, and 2-br flats rent for £1300-£1400 in my building. Property value around £380-400K. I'm with Halifax on a 2.34% fix rate for 2 years.

How difficult is to switch from residential to BTL under these circumstances? Shall I ask for consent to let first, then switch to BTL? And are there any other issues I should consider with this grand plan of mine?

Thank you.

Thrugelmir

With the forthcoming changes to the tax treatment of interest next year. Have you considered the impact on your own finances?

fru-girl

Not really, I'm exploring options at the moment, but that's something to add to the list of things to look into.. thanks.

jamels2

Ask your mortgage company for consent to let as your moving for work reasons, they should give you at least 2 years.

csgohan4

Being a LL is not for the faint hearted and you need some funds to absorb any vacant periods or difficult tenants needing eviction.

FBaby

You need to consider that being a landlord is very stressful and you need to take into consideration that it will cost you quite a bit more than you might expect (repairs, decoration, vacant occupancy which might include council tax, agency cost for re-letting etc...), so you need to factor in a monthly budget for all this.

Also, you need to take into consideration that if you move to a rental place and stay there for over a certain time, if you then decide to buy a property, you will be liable for tax as your rental property will be considered a second residence.

You will most likely be granted consent to let, but most likely only for a certain time, so you need to consider whether you would be able to get a BTL mortgage afterwards.