Could I ever get a BTL in my current situation?

49IM

Age: 30
Salary: 12k gross (yes, twelve! Actually slightly less )
Other income: ~12k gross from room rental (I own a four-bed house and let three of the rooms)
Cash savings: ~35k

Equity in current house: ~135k
Outstanding mortgage on current house: 35k (repayments of £200/month)


To be blunt, I have almost no career prospects but do seem to have a lot more cash and assets than most of my friends of a similar age. I have renovated houses before and worked with landlords as well and am confident I could "run" a BTL if I could obtain one. I'm thinking that my very low official salary could be a sticking point, though? You don't get anything useful around here for less than 120-140k really.

What do you reckon?

ACG

Possibly. You meet the age and homeowner status most request. The only issue you have is your income, but there are some lenders with no minimum income. I assume you declare the £12k from room rentals? I am pretty sure letting out 3 rooms falls outside the rent a room scheme.

I do not think you are going to be looking at market leading rates however.

Dont forget, second property you will need to pay the higher rate stamp duty.

dimbo61

Well the good news with only £35K owing and £35K in the bank you are nearly mortgage free.
Have you got an offset mortgage ?
Keep saving and building up your funds.
Maybe buy a BTL with cash or trade up to a bigger property with plenty of spare bedrooms to rent out

49IM

dimbo61 wrote: »

Well the good news with only £35K owing and £35K in the bank you are nearly mortgage free.
Have you got an offset mortgage ?
Keep saving and building up your funds.
Maybe buy a BTL with cash or trade up to a bigger property with plenty of spare bedrooms to rent out

Indeed - I have an offset arrangement and so I'd rather not pay off my mortgage right now, though I could if required. Then I would have basically no savings, though, which seems worse when it comes to buying more property, perhaps. After all - there are lots of people around with no mortgage and low savings, and they can't buy houses either

Being miles in debt with an existing mortgage, but having significant savings as well - I'm hoping that will make me a more appealing mortgage customer.

Thrugelmir

49IM wrote: »

Being miles in debt with an existing mortgage, but having significant savings as well - I'm hoping that will make me a more appealing mortgage customer.

Savings can be spent. Lenders cannot stop you. So have little bearing on the outcome.

amnblog

You chances are likely to slim considerably in coming months as new rules from the Prudential Regulation Authority force lenders to carry out wider ranging affordability checks on buy to let borrowers.

If you wish to take action, do so, via a broker, sooner rather than later.

49IM

Thrugelmir wrote: »

Savings can be spent. Lenders cannot stop you. So have little bearing on the outcome.

Well what I mean is that I would need those savings for a deposit! A bigger deposit is surely a positive thing when applying for otherwise unlikely mortgages.

amnblog

A bigger deposit may improve credit the position for credit issues, but does not help basic affordability issues.

49IM

amnblog wrote: »

You chances are likely to slim considerably in coming months as new rules from the Prudential Regulation Authority force lenders to carry out wider ranging affordability checks on buy to let borrowers.

If you wish to take action, do so, via a broker, sooner rather than later.

Interesting - thanks. What kind of income would I need before it becomes more realistic? 20-30k range minimum? A useful BTL around here is going to cost 140k or so, and I may reasonably have a 30% deposit.

amnblog

Most buy to let lenders like to see at least £25,000 earned income (not rental income).

Thrugelmir

Why not clear your residential mortgage. Then channel some of your spare money into a pension plan.