First time buyer: unusual situation

24102017

Hello,

I am a potential first time buyer with an unusual situation. I was hoping for some advice on my situation.

I am 30 years old, in a professional job, working in central London, on £55k p/a. My longer-term plan, however, is to move back to my hometown, rather than buy a property in London. I am currently living in rented shared accommodation, because of the expense of a one-bed flat in London, at £800 p/m. I have very large savings of c.£100k. I have low commuting costs - lower than if I was living regionally, which may slightly offset the rent factor.

I would like to look into buying now - while I am working in London and living in the shared flat - in my regional hometown. I understand I would have around a £90k deposit, which is large, allowing for around £10k on costs.

My question is, can I get a mortgage, for a first time buyer, for a property in a different city, factoring in that I will pay rent in London? The additional expense that I have - relative to a local of my hometown - is the rent.

I am looking for a one or two bedroom flat. Initially, if it is 2 bedrooms, I would place a lodger in - if allowed, or even switch the mortgage to a BtL at the first opportunity - however the intention is not an underhand BTL - my plan is to move into the flat when I move back out of London, which will be in the next few years. I want to buy now to get my own home, start paying a mortgage, and it will all be ready. In the case of a 2-bed, where the flat is not rented out in its entirety, I would stay there at weekends.

A few queries:
1. Is the above possible on a normal residential mortgage, i.e. with factoring in London shared-flat rent as an additional expense in my case?
2. Would they consider a BTL for my case, given I have a large deposit?
3. What other options are there?
4. What are the main practical considerations?
5. Finally, which providers are best to approach for this situation?

By way of example, I see flats that I like in a wide range of £180k-£260k. This would require a mortgage of £90k (50%) - £170k (65%).

My grossed-up salary without the London rent would be around £40k, so I imagine I could borrow up to around £160k under this scenario?

Other information: I have an excellent credit history and I am in a well-paid profession which is highly portable around the country and the world. No HTB or shared-ownership.

Thanks and regards in advance for any help!

ACG

1 - Yes it is possible, but it depends on a number of different factors. Ie will you be living in the property at all - weekends maybe? If not, will the property be empty or will it be let out? None of them are an issue (unless the property is empty every day of the week), knowing what the plan is will dictate which route(s) are available.

2 - Yes, but only if the property is let out and you do not plan on staying there.

3 - Many, but it depends on your plans.

4 - What will the property be used for on a day to day basis.

5 - Depends on the above. But you could do with speaking to a broekr really to get some guidance and to get an idea of costs etc.

amnblog

24102017 wrote: »

1. Is the above possible on a normal residential mortgage, i.e. with factoring in London shared-flat rent as an additional expense in my case?

Yes, it is

24102017 wrote: »

2. Would they consider a BTL for my case, given I have a large deposit?

Not if you intend to live there whilst BTL mortgage in place

24102017 wrote: »

3. What other options are there?

Buy as residential and dont let it out

24102017 wrote: »

4. What are the main practical considerations?

Affordability

24102017 wrote: »

5. Finally, which providers are best to approach for this situation?

Do not approach providers unless you want to cause yourself a problem, use a broker

24102017

Thanks for the replies.

Last query: is there really a BTL possibility given that I am a FTB? The % of the purchase covered by mortgage will be in the 50%-65% band, which is low for a first time buyer.

ACG

Yes there is.