HELP!!!....Help to Buy and Renting out (Short term)

AmanC90

Hi everyone this is my first post and could really do with some help.

I read Martins blog regarding Help to Buy ISA and renting out a home purchased using it.

I recently completed on a house using Help To Buy Equity loan scheme.
Since then and due to other factors outside of my control i cannot afford to actually move in to the property. I was wondering if i would be able to rent the property out for 6 months to a year (max) and live with my parents just to save up enough to furnish it along with clear some of the debt i have recently incurred.

I was wondering if anyone has any advice or knowledge around this?

Thanks

Aman

fairy_lights

Hang on a minute, if you can afford to pay the mortgage and council tax then why can't you afford to move in?
You don't need to furnish it all at once, freecycle is a good place to pick up some essentials.
Could you get a lodger in to help out with costs?

Bluebirdman_of_Alcathays

The rules are quite clear - the scheme is designed to help people get on the property ladder, not to help people establish a BTL property business. If you want to rent out the property, you will need to repay the equity loan.


It is normal to not be quite ready for home ownership - in your shoes I would sell the property.


https://www.helptobuyese.org.uk/more-information/frequently-asked-questions

Guest101

You cant afford to furnish it??


A house can be furnished for £500 as a starter! (and most of that is on a new mattress and bed)

AmanC90

Hi Guys,
Thanks for getting back to me.
I wasn't setting the story correctly.
My financial circumstances have changed quiet considerably since i was approved for the mortgage and as such i actually cant afford to move in at all at the minute. The intention is to move in and that will be my sole residence (i don't own any properties and have been living with parents to save up). Which is what has led me to wonder if it would be possible to rent short term whilst i rectify the situation and then look to move to in.

Obviously the easy way to do it would be to sell the property but i am confident i will be back on my feet soon and can move in. It's just taken me so long to save and actually afford it i dont want to lose it so quickly!

ap1985

At what point did you realise that you can't actually afford to move in? Are you saying you can't afford to pay the mortgage either plus the council tax? Can you not get a lodger to initially help you with costs?

Pixie5740

It's not only against the rules of the HTB EL scheme but I doubt your mortgage lender will grant consent to let before you've even moved in.

When did your financial circumstances change dramatically, if was before completion then I think you are supposed to tell your mortgage lender.

How many bedrooms does the property have? Would it be feasible to move in and get a lodger until you're back on your feet? Alternatively you could leave the property sitting empty until you are able to move in (check with your insurance company about how long it can be sat empty though).

G_M

Hard to comment without understanding why you 'can't afford to move in'.

Is the problem the mortgage repayments? The furniture? What?

As others have said, you would have to switch to a BTL mortgage (which you can't becuae of the HTB rules).

Or get CTL from your mortgage lender (you could ask -but rarely granted in the first 6 months).

And finally you'd be breaching the HTB rules.

It's no good saying "The intention is to move in and that will be my sole residence..."

That's like driving at 100 mph down the motorway and then saying "The intention is to slow down when I get to Birmingham and drive properly after that."

xylophone

Why can't you move in?

FBaby

Becoming a money cost money.

Being a LL and not getting rent paid cost a lot of money.

Being a LL, not getting rent, and having to take the tenant to court cost even more money.

You might not have the money to move into your house but you have even less money to take on being a landlord.

[Deleted User]

I realise this makes you uncomfortable, but as you can't rent the whole property out, you have no choice but to look at why you can't move in and see if things can be done about that, in order of priority bills.

1) Can you pay the mortgage and council tax? If not you are going to have to maximise your earnings (get a second/first job doing whatever you can get paid for, prioritise bills - pay mortgage etc before everything else).

2) Go on our debt free wannabe board, with a fully worked out budget, they may be able to advise on the debts.

3) Freecycle is good for all sorts of things that will help you set up home if you have no money for this, as is asking parents/friends/relatives for anything they don't want. If you can equip the house basically, then you might be able to get lodgers in, keeping one room for yourself. A rare lodger might be willing to furnish a room themselves if basics like a cooker/fridge are in place. Lodgers will help with whatever financial problems you are having. I lived in a house with a couple who gradually reduced the number of lodgers as their finances improved. Much more flexible arrangement than renting whole house out.