How easy is it to change to a buy to let mortgage?

missp1982

Hello, first time of posting so hope someone may be able to provide some advice.


I currently own my own property, which has approximately £45,000 of equity in it.


My partner lives with me but is not named on the mortgage.


He has some savings so the plan going forward was for him to purchase a property in his name and rent this out (or sell on depending on the property). Am I right in understanding that this would mean he wouldn't apply for a normal homeowner mortgage?


Having looked at buy to let mortgages with Halifax it states there must be a £25% deposit (no issue there) but that the applicant must already own a property. This would obviously cause an issue as he is not named on my mortgage.


Another option therefore could be to rent out my house and buy another one for us to live in. I'm wondering how easy it is to change from a normal mortgage to a buy to let one?


Or there may be some other options for us to consider, any thoughts would be appreciated.

marliepanda

You don't really change it, you get a whole new mortgage, aka remortgage to a buy to let.

If you do this you are the landlord and you will be liable for tax and legal requirements of it, not your partner.

If you are buying a new property together you will be liable for the extra 3% stamp duty.

kingstreet

What about consent to let from your existing lender?

Where is the deposit for the new purchase coming from?

FBaby

As he is not yet a home owner he will be limited with the number of lenders and most likely won't get anywhere with high street lenders. He needs to go and see a broker.

foxy-stoat

So does your partner want to be a property developer or just flip a few properties, or do you want to be a Landlord?

If you have enough equity and can let your home out for at least 25% more than your current mortgage then its possible that you can get Consent to Let. You need to do your research with Income Tax rules, current and new moving forward, risks of being a Landlord and the responcibilties.

If your partner wants to flip a few properties he can, but will need to factor in mortgage, legal, buying and selling costs - he wont be able to sell a property within 6 months of buying it unless to a cash buyer - stuff like that. If he changes his main residence he could [STRIKE]avoid[/STRIKE] reduce CGT on the properties - depends how cheap he can buy them for.

Cakeguts

Whatever you are thinking of doing you have got to do some research on what kind of property good tenants want to rent in your area. People think that because there is a shortage of property to rent that they can let anything. What they don't realise is that the shortage is of good rental properties in areas that good tenants want to rent. If you have a mortgage on a property you need the rent to cover the mortgage? What you don't want is to be paying the mortgage with no rent coming in. If you buy the wrong property in the wrong area you will finish up paying the mortgage on a property that is either vacant or has a tenant who has stopped paying the rent. You may also find that the tenant wrecks the place before they move out so not only have you not had any rent but you also have to pay for extensive repairs before you can let the property again.

Now that that property is listed online you can easily do simple research. Have a look at what is available to rent in your area at the present time. Letting property is a business you have to do your market research.

I will give you an example to start you off. There is an area near Manchester that I know where if you want to rent a 2 bed terraced house with no private parking you can find plenty in all areas. If you want to rent a 3 bed terraced house there are a few. If you want to rent a 3 bed house with its own drive or off street parking you are going to have to wait until one becomes available. So anyone with a 3 bed house in an area with good transport links and walking distance to shops gets the pick of tenants. Someone with a 2 bed terraced house can expect to have vacancies because there are a lot to choose from in all areas. It is the same as any business if you want to be successful you have to spot a gap in the market and fill it.

So your house that you have now look on the internet and find out what sort of rental it would make. You have to look at it with no emotional attachment. Then find out what sort of rental property your partner could afford.

Now you have to do some research on what being a landlord means.

missp1982

Thank you all for the responses. Seems we have a lot to look into.


The deposit is coming from savings he has.

kingstreet

Consent to let would then appear to be the most sensible option.