Let to Buy/BTL with no other home owned

FloppyDisk

Are there any brokers out there or recent recipients of a Let to Buy mortgage able to shed some light on how well liked they are by the industry at the moment?

I am currently renting a house, letting out my old house and would like to buy new house to live in. This offer was based on the principle that I could get a let to buy mortgage, which was recently thrown into doubt but an IFA telling me that I can only raise a BTL mortgage for four times the rental income, as if it is a standard mortgage, rather than applying the usual stress test criteria. I understand that I am excluded from most BTL mortgages as I don't own another home at the time of applying.

Let to buy mortgages don't seem to get a lot of coverage so I can't really gauge how safe my situation is, it does seem like this is exactly what they are designed for, but have the new lending criteria and stress tests reduced their availability or likelihood of acceptance?

ETA - the BTL/LTB remortgage would be to 60% LTV and I am aware that this involves additional stamp duty, that's all factored in.

Cornucopia

Let to Buy covers a very specific scenario where you presently live in Property A, and you wish to let that out and at the same time buy Property B to move into.

The mortgage is arranged on Property A, and is subject to BTL criteria on that property. In my (limited) experience the Lender expects that the whole scenario will be completed in 6-12 months from the date of the remortgaging of Property A i.e. that amount of time to find & buy Property B, move into it, and let Property A.

It doesn't sound like your scenario is Let to Buy, TBH (because you are not living in your Property A). Depending on your figures and the relative values of the properties in question, someone here may be able to advise you further. (It sounds like you need a straight Residential Mortgage on your new property - if not that, then a property reshuffle to consolidate equity is a possibility).

FloppyDisk

Thanks Cornucopia - the house I own has a residential mortgage with consent to let, is close enough to living in it? I know logic rarely applies in this cases but beyond kicking out my tenants for the time being (I could swap with my current house?!) I can't see how I can get a BTL if I don't own the 2nd home first, which leaves me with bridging finance.

Cornucopia

FloppyDisk wrote: »

Thanks Cornucopia - the house I own has a residential mortgage with consent to let, is close enough to living in it?

Ah, okay. Short answer: I don't know. Long answer: you might find a niche lender happy to remortgage it as BTL based on your existing LL experience and your intention to buy a residential property.

I know logic rarely applies in this cases but beyond kicking out my tenants for the time being (I could swap with my current house?!) I can't see how I can get a BTL if I don't own the 2nd home first, which leaves me with bridging finance.

If you want to set up the arrangement as a true LTB transaction, then yes, I think you would need to be living in that property, not just because that's the way it's intended to work, but also because the Lenders don't like giving BTL mortgages to people without an existing owned property.

Or you could look and see if any lenders will treat your Consent-to-Let property as if it were BTL and make you a residential offer on that basis.

FloppyDisk

As you can imagine, I don't really mind what the label on the tin says as long as I can take some equity out.

Perhaps I even need to approach my current lender for an additional loan, then remortgage straight after but I imagine that will cost me a few bob in fees if it is even possible.

And in less than 3 months time while I'm asking for miracles??

Cornucopia

Yes, I can see that the name is unimportant, however the Lenders tend to imagine very specific scenarios covering their products.

I'd definitely recommend looking for a decent Broker (not an IFA), hopefully one who gets the scenario quickly, and has some canny ideas about how to address it.

FloppyDisk

Thanks, are you able to suggest the best place to find an experienced broker? Presumably I am looking at paying a fee for their experience in this case.

Cornucopia

Ideally personal recommendation locally.

You could have a word with one of the Brokers associated with a local estate agent where you are looking to buy. That would probably be an easy way to get some ideas without committing to a fee.

starnac

Hi, we were in a similar position. We moved from one area to another, couldn't sell house so got consent to let on a residential mortgage and rented the house out. We moved in with my parents and once back up on our feet we saved a deposit and got a residential mortgage on a new house which we currently live in. We went through a broker and had no issue as the mortgage was covered by the rent (the consent to let was enough for them) and we had a deposit for the new house.

We have recently remortgaged the first house to a BTL mortgage and apart from paperwork problems we had no problem changing it over (we had 75%LTV)

I don't know if that's any help to you?

FloppyDisk

Thanks Starnac, only difference is that I need the cash from the remortgage to pay the deposit for the residential. Otherwise it sounds like your situation was two independent deals, whereas my understanding is that mine are very much dependent on each other.

starnac

FloppyDisk wrote: »

Thanks Starnac, only difference is that I need the cash from the remortgage to pay the deposit for the residential. Otherwise it sounds like your situation was two independent deals, whereas my understanding is that mine are very much dependent on each other.

Oh I misunderstood sorry. Good luck. I hope it's not too difficult for you