Buying a buy to let when in employers accomodation

Marvel1

00ec25 wrote: »

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.

:eek:

I live alone and that I have just under that after paying all bills solo, something is definitely not right with most bills covered.

Gwendo40

cjdavies wrote: »

:eek:

I live alone and that I have just under that after paying all bills solo, something is definitely not right with most bills covered.

I was also :eek: at that... I also live alone, only work part time in an unskilled job, pay into a pension and I manage to save an average of £400 a month.

mr_munchem

That’s what came to mind for me!

OP are you both working? If so, what are you earning and what are you spending on that’s leaving you with £200-£300 each at the end of the month?!

Kj1006

We would want to rent out the property we purchase.

We want to buy a house that we would live in eventually, it is not an investment property as such and would be somewhere we would move to. Also we live in a National Park where a small 2 bedroom property with a small yard is £245k, we want to try get somewhere before all the houses are snapped up for second homes and price increases get even worse!

At the moment of course we could afford much more than £600 a month each, but we are trying to be realistic in that when we have a family for example we will not be over stretching ourselves when our income is less. We felt that that amount plus any rental income would cover the mortgage and go into a pot for any necessary repairs etc.

kingstreet

Typically you will need;-

25% deposit

monthly rent to be at least 140% of monthly mortgage interest at 5.5% per annum

to be able to pass your chosen lender's residential affordability calculation for the purchase as it will try to ensure you aren't buying the property to live in...

Kj1006

@00ec25

We have roughly £30k towards a deposit now.

I own my own business and my partner is a gamekeeper. His wages is reduced because of the benefits of House etc.

I am very cautious with my money and am maybe being over cautious.

I do feel some of the posters are being very judgemental, we are new to this and are simply looking for advice not sarcastic comments about what some people can manage on their own! Good for you, we are just being cautious and trying to not over stretch ourselves

Marvel1

cjdavies wrote: »

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

To repeat this, do you know?

00ec25

Kj1006 wrote: »

@00ec25

We have roughly £30k towards a deposit now.

as mentioned, 25% deposit is the absolute minimum for BTL so the max you can afford to buy is property priced at 120k if you need to borrow the remaining 75%

30/25 x 100 = 120 !

can be done, random example:
http://www.rightmove.co.uk/property-for-sale/property-57640324.html

but that may not be the sort of place you want to end up in as your main home and in the meantime, even in the Lake district, a property that is suitable for letting is not necessarily one that you'd buy to live in, unless you are talking about the high end market (you are not)

joshiesaunt

I know someone in exactly the same position as you. It's a very good idea to get on the ladder whilst you are still in tied accommodation. Firstly, however, it will be nigh on impossible to get a BTL without an already existing mortgage/house. However, there are brokers who will be able to get you a residential mortgage with immediate permission to let as long as your employer is willing to say you will be living there eventually. My friend has a Nat West mortgage secured through a broker at 1.69%. Secondly, as others have said, you will need to really read up about becoming a landlord and your responsibilities re; gas safety etc. Get a good agent to manage it but have money set aside for unexpected repairs etc. You will need to pay tax and complete a tax return annually. One thing our friend found out is that the person on the tied accommodation license will not need to pay capital gains tax if you decide to sell the property (the rules are buried away in the HMRC book!).
You will need a substantial deposit, stamp duty, fees etc.
Good luck!

kingstreet

joshiesaunt wrote: »

Firstly, however, it will be nigh on impossible to get a BTL without an already existing mortgage/house

There are several lenders who offer BTL products to non-owners

However, there are brokers who will be able to get you a residential mortgage with immediate permission to let as long as your employer is willing to say you will be living there eventually.

Tends to apply more to services personnel. Outside that, you mention NatWest who want a timescale put on that occupation commitment, usually no longer than two years.

This is definitely a broker job as suggested.