Moving from residential to CTL/BTL

laurajy

Hi all,

Although it's a while away, I thought I'd attempt to gather some information now, so I appreciate all answers!

I'm in the situation where I own a property and my partner owns a property. We'd like to start living together in his property some time within the next 12 months, whilst keeping my property for rental.

Next year, I'll reach the end of my 2-year fixed term residential mortgage with Natwest. I would like to keep my options open when moving in with my partner. I'd like to have at least a six-month buffer before moving to BTL (after all, if I have to move back into my property, I don't want to be paying over the odds!).

With this, I've been looking at BTL mortgages (which I've found all require a 25% deposit) and CTL mortgages (staying on a residential rate but paying a £100 fee to Natwest and regaining consent after a set period). If I were to remortgage next year under residential, is CTL likely to be granted almost immediately after remortgage?

In addition, I will not have paid 25% towards the value of the property until maybe 5-6 years have elapsed (I'll be at around 15% at the end of year 2). Will Natwest be likely to allow me to remortgage as BTL having less than a 25% deposit?

Thank you for any advice you can offer!

dimbo61

I am not sure NatWest offer BTL mortgages so you really need a broker to search the market if you do decide to get a BTL as they will shop around the BTL mortgage market .
At the moment I would wait until your current deals is nearing its end and then apply for Consent To Let

amnblog

You wont remortgage as buy to let without sufficient equity or sufficient rental income. Both are likely to be an issue here.

Nat West will usually give consent to let for a limited period if life changes mean you need to let the property. It is not a permanent solution.

Lenders release residential mortgages on residential rates on properties for borrowers to live in. Therefore they will often refuse to offer a new residential mortgage rate on a property under CTL.

Why bother to request CTL?

1. It is a breach of your mortgage terms to let without requesting permission from the Lender.

2. Not having consent to let can complicate your situation if you later have problem with a tenant.

laurajy

Hi @amnblog

Thanks for your response!

amnblog wrote: »

Lenders release residential mortgages on residential rates on properties for borrowers to live in. Therefore they will often refuse to offer a new residential mortgage rate on a property under CTL.

So in this case, would the lender release a residential mortgage on a higher rate on a property under CTL?

I really want to know what my options are, if any, under my current circumstance.

Thanks!

sal_III

It might sounds radical, but since you are already paying mortgage without receiving income from the property, have you considered the option to leave the property vacant for 6 months to allow you to keep your options open.

Alternatively you can look at getting lodgers in the property. check if your mortgage/lease allow for that.

laurajy

sal_III wrote: »

It might sounds radical, but since you are already paying mortgage without receiving income from the property, have you considered the option to leave the property vacant for 6 months to allow you to keep your options open.

The reason for the move would also be to save money (we are broke living separately!), so I'd really like to stop paying the mortgage. I'd love it if there was a feasible way to do this. If I didn't want to keep my options open, what would be the best route to take?

foxy-stoat

Keeping your options open (ie moving back into your property) then either stay with current lender or move and request CTL after 6 months.

Or you can keep it residential and get a lodger or 2 depending on the number of bedrooms, and keep 1 bedroom for you. You are allowed to get a certain amount of money from lodgers tax free and you wont need CTL.

If you take out a BTL mortgage you wont be able to move back into it - but do you really want to be a Landlord and having to finance voids, and possible issues with tenants and keeping on top of your income tax returns.

Other option is to sell it.