Purchasing first house but renting elsewhere

tl202

Hi all,

I'm looking to purchase my first house next year but I think my situation seems a little different to most that have come up in guides and threads I've looked at, so I've decided to post on here to see if any more knowledgeable than me could provide assistance.

Basically, my situation is that I am working in London but looking to purchase my first house up in the midlands as there is nothing within my budget close to London. Ideally, I would be looking at a 3 bedroom property with one room to keep as my own, and the others rented out. Rather than having to pay for rail travel I am wondering what the law would be if I was to carry on in my current situation of renting in London in the week, but then only travel up to my purchased property at the weekend.

I've been having a look around, but various sites seem to offer conflicting viewpoints on what this would make me. Would the property count as my main home if it is my sole property and I live there at weekends, meaning that I could offer the remaining two rooms to lodgers? Alternatively, if viewed from the resident landlord requirement that other sources indicate, how would this leave me if I am only in the property 2 days a week?

Any advice would be greatly appreciated and sorry if I've missed out anything.

BlackBird75

Yes, you can designate the Midlands house as your Permanent Home Address (Principal Private Residence) and the London property as your Residence at Work address.

You must put the council tax and all utilities etc in the Midlands house in your own name.

I've done it myself and never had a problem.
But it does mean paying council tax in two places.

If you're single, and you lodge in London that would be easy.

tl202

Many thanks for the quick and helpful reply! Aware that it would mean paying for two sets of bills but this would still work out far cheaper than a season ticket and commuting so I'm ok with this.

If I register the house as my principal private residence, would I still be eligible for the rent a room scheme on the two rooms I let there?

BlackBird75

The main one to watch out for is car insurance.

But DVLA you can just put the Midlands house, as that is your PHA/PPR.

BlackBird75

tl202 wrote: »

Many thanks for the quick and helpful reply! Aware that it would mean paying for two sets of bills but this would still work out far cheaper than a season ticket and commuting so I'm ok with this.

If I register the house as my principal private residence, would I still be eligible for the rent a room scheme on the two rooms I let there?

Yes, you would.
But be careful with the HMO rules. They are getting stricter.
Also you need to check your lodgers are not illegal immigrants ("Right to Rent" laws) UNLESS they go home at weekends (or have another home basically).

franklee

What sort of renting in London will you do? You can for example be a lodger there.

You cannot be a tenant on an assured shorthold tenancy if it's not your only or principle home. I suspect that may restrict what landlords will want you.

Mutton_Geoff

franklee wrote: »

You cannot be a tenant on an assured shorthold tenancy if it's not your only or principle home. I suspect that may restrict what landlords will want you.

Are you sure? In 2016, I owned two properties during an overlap period between selling them, and I also held an AST on a property I was using as temporary accomodation in another part of the country.


I gave one of my own property addresses as a point of contact and the letting agent was fully aware of my situation.

Pixie5740

Mutton_Geoff wrote: »

Are you sure? In 2016, I owned two properties during an overlap period between selling them, and I also held an AST on a property I was using as temporary accomodation in another part of the country.


I gave one of my own property addresses as a point of contact and the letting agent was fully aware of my situation.

To be an Assured Shorthold Tenancy it must be the tenant's only or main home.

s1b of the Housing Act 1988 which defines an assured tenancy (and therefore also an assured shorthold tenancy) as being a tenancy where...

(b) the tenant or, as the case may be, at least one of the joint tenants occupies the dwelling-house as his only or principal home …

Pixie5740

OP, your situation isn't unique, there have been similar threads in the past.

Things are not as simple as BlackBird 75 is making out. Firstly, you'll face issues getting a mortgage. If you don't currently commute in and out from the midlands and the area you want to buy in is not within a reasonable commuting distance of London lenders won't entertain giving you a mortgage. Lenders won't believe that you intend to live in the property as your main residence and will suspect you want to let it out instead.

If the property is not your main home and you cannot satisfy a court that it is your main home your lodgers will actually be tenants. I'm not sure you would pass the resident landlord test with HMRC either.

lookstraightahead

So It kind of makes it almost impossible to 'work away' unless you stay with friends / live in a hotel? Thanks pixie, that's new to me as was looking to buy a property in Wales but rent in the midlands for work.

CIS

It is also not as easy as simply designating a property as your 'sole or main residence' for council tax purposes - the determination of which is your main residence for council tax is a matter of looking at the circumstances (where is your Dr, where are registered to vote, where is your post sent etc etc) and considering where a 'reasonable onlooker' would say the residence was.