First time buyer - want to rent out rooms

Elsterap

Hi.

I'm about to get my first mortgage for my first house and Iwould like to rent out 4 bedrooms in the house and live in the last.

Will I still be able to use the government first time buyers schemes?

Will it be classed as a buy to let mortgage in the eyes of the bank? Because I will only have a 5% deposit and Ithink they require more than that.

csgohan4

https://www.gov.uk/rent-room-in-your-home/the-rent-a-room-scheme


might be useful


As long as your living in the house you don't need a BTL mortgage


https://www.gov.uk/private-renting/houses-in-multiple-occupation


is useful if you want more than 5 people living at your place in future

Person_one

4 strangers in your new first home? Sounds like a complete nightmare. Why not buy a smaller place and just have one or two rooms rented out to lodgers for now?

michelle09

Are you sure you're going to be happy with that arrangement? Not the renting out of rooms - we rented out one spare room as soon as moved in, and the second one for six months not long after. It was to help a friend out but I'm not going to let them stay after the six months, four adults in a three bedroom house is not spectacularly fun. The rent money is hugely helpful but it's not worth it for us with two lodgers.

That being said, the previous owners had seven people living in the house, which I would have found horrendous, so it may be a personal preference.

If you're one person with four lodgers, that's an imbalance of power that I wouldn't be happy with. What will you do if the four of them want things one way and you want it another? And if you have to rent out four rooms in order to afford it, what happens if one is empty? Or if you have repairs that need doing?

G_M

You'd need to read the terms of the FTB scheme.

However that would become an HMO (House of Multiple Occupation) so look at your council website for whether it requires licencing and what conditions you'd have to meet.

Normally lenders are not concerned about lodgers. If you ask them, make it very clear you are considering lodgers, not tenants - some staff for lenders are not always clear of the difference.

See also

LODGERS (Licencees/Excluded Occupiers)
A lodger (broadly) lives in the same property with a resident landlord & shares facilities. Unlike tenants, lodgers have few rights.

The Housing Act 1988 provides definitions of 'Resident Landlord' & 'same property' (S31 & Schedule 1 (10).

See:

LodgerLandlord (21 tips from solicitor Tessa Shepperson + General information site)

Landlordzone (Various articles on taking in lodgers)

Renting out rooms in your home (Government info)

Rent a Room Scheme (HMRC guide for tax-free income from lodgers)

PasturesNew

Insurance companies are "funny" about lodgers, particularly multiple lodgers. Check/re-check how quotes might alter with an increased number of lodgers and how you might even find yourself a bit stuck for providers after two.