First time buyer - main home or holiday let?!

Heggoo

Hi

I'm 27, single and looking to buy my first house. I say house not 'home' because I'm actually looking to buy something that I would use as a holiday let.

I work in London and live with my parents in Essex. I can't afford to buy anything decent here and don't really want to. But I do want to get my foot on the property ladder.

So I've been thinking about buying a house in Wales (I love Wales and really want to be able to own a little place a can go to and just escape now and again). I'd only be there for a few weeks of the year and might let it out to family, friends and put on air bnb on a short-term basis.

However, I don't really have enough money for a buy-to-let mortgage but was told that for it to be considered a 'main home' then it can only be empty for a maximum of 30 days a year unfortunately, this just isn't feasible for me. I might start looking for jobs in Wales but for the time being I'd have to stay in my current situation (living at home and using my new house for holidays and weekends)

Basically what I want to know is - what can I do here? Would it be illegal for me to take out a mortgage and not live in the property for 10 months of the year? If this is the case, what do people do about their mortgages if they go travelling regularly and own a property?

Should I instead try to save up for a buy-to-let mortgage? Even though it's just a holiday let and won't actually be 'rented' to anyone on a long term basis?

Really struggling to find any advice on this - would appreciate any insight that anyone has on this.

Many thanks :j

Teamocil

You may love Wales, but Wales certainly won't love you for this.

Heggoo

...and I don't really love the fact that I'm priced out of my own area, but what can you do? As I mentioned, this is not a second home. This would be my first home and I'd have the view of moving in eventually but that's not realistic at this moment in time. So I'm looking for a solution that allows me to get my foot on the property ladder.

csgohan4

even if you have money for a BTL, have you considered the tax and legal implications, eviction costs, void periods, maintenance?


It's no longer a money making machine

Heggoo

I can’t emphasise enough that this IS NOT a money making machine. I won’t be tenanting. This is just a way of getting myself on the property ladder in a place that I’d actually like to live, with the long-term view of moving there eventually but doing short-term lets to cover a little bit of the mortgage costs. I understand there are further cost implications but I’m prepared to take these on. I just want to know what kind of mortgage I’d need to make this a reality.

As I mentioned, I wouldn’t be doing long term letting. I’d be letting short term (max 2 weeks at a time) for around 6 months of so if the year, mainly to family and friends but potentially to holiday goers as well.

AnotherJoe

How would you manage check in/out and cleaning for Airbnb customers from hundreds of miles away? Who will look after the property, fix issues, even minor stuff like mow the lawn etc? I would guess as you are living with parents you have little to no practical experience of doing (and paying for) all the stuff that needs fixing on a house over time. Most people will DIY it but if its remote and you need tradesmen in for every little thing that's expensive.
Also, Have you canvassed family and friends as to how much they will pay you for a week or twos holiday and how many will take you up on your offer? Are they all super keen on Wales as a holiday destination ? Every year!? Will they be expecting "mates rates" ? Will you expect them to clean up, wash the linen etc?

You say you want to get on the housing ladder but that presumably is so your asset goes up in price, that is your rationale ? However in the places you'd likely be buying, house prices aren't appreciating. The reason they are cheap is, no jobs. So it likely won't go up in price. So, I would just wait until you are ready to move there because you will likely find this is loss making, what with all the costs for running it.

Also you asked

Would it be illegal for me to take out a mortgage and not live in the property for 10 months of the year? If this is the case, what do people do about their mortgages if they go travelling regularly and own a property?

The answer is, no it wouldn't be illegal but no mortage company will lend on a normal residential mortgage for a house hundreds of miles from wher you work so You'd have to get a holiday let mortgage. Higher rates bigger deposit.
As for people that go travelling regularly they most likely have had their mortage for years before they did that and won't be letting it out short term and uf they do it long term, say for a year or two , they ask permission or chance it. Very different situation to you.
So, on multiple counts, your plan has too many flaws to be even remotely realistic. . If you want to get on the housing ladder do it in Essex or further out from where you can still commute in to London , or move to wales, work from there (new job or can you work remotely?) and then buy there.

davidmcn

Heggoo wrote: »

I just want to know what kind of mortgage I’d need to make this a reality.

If it's a holiday let then you'll need a mortgage specific to holiday lets. Which is a rather specialist area, and it's likely that their criteria may rule you out.

BTL mortgages are for properties being let out on assured shorthold tenancies (or equivalent), and even they can be tricky to get if you don't own other property.

Normal residential mortgages don't work if it's not your main residence.

Heggoo

davidmcn wrote: »

If it's a holiday let then you'll need a mortgage specific to holiday lets. Which is a rather specialist area, and it's likely that their criteria may rule you out.

BTL mortgages are for properties being let out on assured shorthold tenancies (or equivalent), and even they can be tricky to get if you don't own other property.

Normal residential mortgages don't work if it's not your main residence.

Thanks for your help. I'll look into holiday let mortgage.

Heggoo

How would you manage check in/out and cleaning for Airbnb customers from hundreds of miles away? Who will look after the property, fix issues, even minor stuff like mow the lawn etc? I would guess as you are living with parents you have little to no practical experience of doing (and paying for) all the stuff that needs fixing on a house over time. Most people will DIY it but if its remote and you need tradesmen in for every little thing that's expensive.

Also, Have you canvassed family and friends as to how much they will pay you for a week or twos holiday and how many will take you up on your offer? Are they all super keen on Wales as a holiday destination ? Every year!? Will they be expecting "mates rates" ? Will you expect them to clean up, wash the linen etc?

All things in here have been considered so I won't address them.

You say you want to get on the housing ladder but that presumably is so your asset goes up in price, that is your rationale ? However in the places you'd likely be buying, house prices aren't appreciating. The reason they are cheap is, no jobs. So it likely won't go up in price. So, I would just wait until you are ready to move there because you will likely find this is loss making, what with all the costs for running it.

The reason I'd like to buy in Wales is because I love the area. It has very little to do with wanting value to go up. I want to invest in something and have somewhere that me and my family can go every year, and possibily move in eventually if my working circumstances change.

Also you asked
The answer is, no it wouldn't be illegal but no mortage company will lend on a normal residential mortgage for a house hundreds of miles from wher you work so You'd have to get a holiday let mortgage. Higher rates bigger deposit.

That's helpful, thanks!

So, on multiple counts, your plan has too many flaws to be even remotely realistic. . If you want to get on the housing ladder do it in Essex or further out from where you can still commute in to London , or move to wales, work from there (new job or can you work remotely?) and then buy there.

I'm going to look into a holiday let mortgage. I know there will be criteria that I might have to meet but if you don't try, you don't know.

Thanks for your response.

AnotherJoe

Heggoo wrote: »

The reason I'd like to buy in Wales is because I love the area. It has very little to do with wanting value to go up. I want to invest in something and have somewhere that me and my family can go every year, and possibily move in eventually if my working circumstances change

Consider staying in holiday rentals instead. Nothing in that list of things that that wouldn't cover, most likely considerably cheaper, definitely much less hassle, and gives you the opportunity to try different places in Wales until you find an area or house that suits.