Buying a buy to let when in employers accomodation

Kj1006

My boyfriend and I live in a house that is provided by his employer. We do not have to pay rent, council tax, water rates or for heating oil in this property. We are desperate to get in the property ladder but we have to live in the employers house for my boyfriends job. Would we be able to get a buy to let mortgage even though we are first time buyers? We would like to rent out the property until we are in a position to live in it ourselves. We currently pay £200 each into savings every month so would be able to contribute this each to a mortgage every month as well as any rental income that was generated. What is everyone's opinion?

Slithery

If you are needing a mortgage then no, probably not.

One of the conditions of most BtL mortgages is that you must already own a property.

Wyndham

Given what you have said, you don't own the property, so you can't borrow against it. Just to check, if your boyfriend changed jobs, would you lose the accommodation?

You could have a separate property which you own yourselves, but would need to be able to fund the mortgage on that. £200 a month is unlikely to be enough to do that unless you also have a substantial deposit.

G_M

Have you spoken to an independant mortgage adviser yet?

Kj1006

No we don't own the property, yes if he left his job we would have to move out. In total we put away £400 a month together but could probably stretch this to £600. But don't see the point in having a house sat empty so would want to rent it out

Marvel1

Do you know what laws as a landlord you must follow? What rights tenants have?

Wyndham

Kj1006 wrote: »

No we don't own the property, yes if he left his job we would have to move out. In total we put away £400 a month together but could probably stretch this to £600. But don't see the point in having a house sat empty so would want to rent it out

But you can't, its not yours to rent out. Check your paperwork, there may be an exception because of the circumstances, but I think it's a no go.

Slithery

@Wyndham

I took the OP as meaning they were going to continue to live in the employers house, but purchase one of their own to let out.

Wyndham

Slithery wrote: »

@Wyndham

I took the OP as meaning they were going to continue to live in the employers house, but purchase one of their own to let out.

Yes, thank you, I now think you're right and I misunderstood.

In that case, OP, talk to a mortgage broker and see what they say.

thelem

Kj1006 wrote: »

We are desperate to get in the property ladder but we have to live in the employers house for my boyfriends job.

Why are you desperate to get "on the ladder"? Free rent and bills is a great benefit to be receiving, you should be happy about it.

If you're not living in a property then it is just an investment like any other. Yes, many people have made good returns on property, but there are also many people who have lost money or have sold for what they paid. Being a landlord is a job in its own right, it's not a get rich quick scheme. When you come to want your own home, will your dream home at that time be the same property that makes a good rental investment now? I'd have thought you'd be looking for different things, so you'd only be looking to sell your rental investment anyway.

It sounds like what you really want is to be able to afford to buy a home of your own when your no longer have the free accommodation. To do that you just need to have built up a suitable sum of money - it doesn't matter if that sum of money is in other property, a savings account, stocks and shares, gold or something else. Concentrate on putting away as much as you can afford each month, and putting that in an investment that gives a good return (see the Banking & Saving section of this site for advice).

00ec25

thelem wrote: »

Why are you desperate to get "on the ladder"? Free rent and bills is a great benefit to be receiving, you should be happy about it.

actually people living in tied/job related accommodation should be desperate to get on the ladder because when they cease to have the job they have no where to live and could be at an age where their options are then limited. Buying now whilst in work and able to pay towards a property just like they would if they were living in it is a sensible possibility. It is what many armed forces members do after all.

OP as others have said, for a BTL the 2 things you are most likely to fail on are:
a) most lenders require you to already own a residential property. The reason is to prevent you from buying on a BTL mortgage and then living in it yourself to circumvent the lending criteria for a residential mortgage. However, in your case because you live in work related accomm anyway you may be able to make a case to relax that rule

b) BTL mortgages require big deposits, normally 25%+. You have not mentioned how much have you got and therefore whether you can realistically afford anything anyway? You have to buy it first before you start worrying about whether £400 pm will cover the repayments!

My concern in this case though is £400 per month is chicken feed for a couple and if only £600 is "stretching it", then they need to speak to a mortgage broker urgently and have a reality check done before they get carried away with unaffordable ideas.