Is a let to buy suited?

911bill

Hi All,

I'm new here. :beer:

I am wondering what to do next, I am due to go and book an appointment with Barclays, who I currently have a mortgage with but I know that their advice could be bias towards their own offerings and so on, so I wanted to get some non bias advice on here.

I currently own my first home, which I bought for £222,000 and is now worth approx £330,000.
I have approx £144,000 remaining on my mortgage and that has just ticked under 19 years.

I have out grown my flat, which was lovely when I was a single guy but now I have a pregnant wife, I (we) really want to get out.

So, I was looking at what next. The houses we are aiming for are around £500k - £525k, I was looking in to keeping my flat but letting it out, the one thing that really puts me off that is the damn stamp duty!!! I hate it, it just seems like I am throwing money away and for a second home, they bump it up even more, so I think my idea of keeping my flat is doomed from the start, is it even worth it anymore?

I take home approx £70k and she £21k, We have savings but ideally we want to keep those to one side fir furnishings etc etc.

Is the let to buy worth it or should I forget that since it may not e affordable or hinder the amount we are offered for a new mortgage.

Many thanks for any help and advice.

B!:T

chunkytfg

ignoring the affordability aspect of it, do you really want to be a landlord and accept the risks associated with that such as a tenant wrecking the place, not paying rent, generally being a PITA etc?

Alternatively sell the flat, put down a nice deposit, have a nice comfortable life knowing that you're not going to get a phone call at 10pm one friday night from your tenant to ask you to come fix the electrics as they circuit breaker has tripped and they don't know how to reset it(yes that really happened to me along with 'a bulbs blown can you send me another one please?')

Dorian1958

My immediate reaction is to ask if you have undertaken a thorough review of your experience and skill set to determine if you have what it takes to be a proper landlord. There is much to consider including the ongoing responsibilities you will have to your tenants. This is not for everyone. I suggest you read the many buy to let threads on the house buying and renting forum. Be prepared to have to undertake a lot of studying on the legalities of it all if you are going to do a job where you look after your tenants properly. Good luck.

AnotherJoe

911bill wrote: »

Hi All,

I'm new here. :beer:

I am wondering what to do next, I am due to go and book an appointment with Barclays, who I currently have a mortgage with but I know that their advice could be bias towards their own offerings and so on, so I wanted to get some non bias advice on here.

I currently own my first home, which I bought for £222,000 and is now worth approx £330,000.
I have approx £144,000 remaining on my mortgage and that has just ticked under 19 years.

I have out grown my flat, which was lovely when I was a single guy but now I have a pregnant wife, I (we) really want to get out.

So, I was looking at what next. The houses we are aiming for are around £500k - £525k, I was looking in to keeping my flat but letting it out, the one thing that really puts me off that is the damn stamp duty!!! I hate it, it just seems like I am throwing money away and for a second home, they bump it up even more, so I think my idea of keeping my flat is doomed from the start, is it even worth it anymore?

I take home approx £70k and she £21k, We have savings but ideally we want to keep those to one side fir furnishings etc etc.

Is the let to buy worth it or should I forget that since it may not be affordable or hinder the amount we are offered for a new mortgage.

Why?
Its expensive on many levels, risky, a load of hassle.
Its not just expensive on the SDLT which in your case would be a whopping £15k, how long would that take to get back on profits from the rental flat? 3 or 4 years?

Theres also the bigger mortgage you'll have (because you cant use the equity from your flat to have a smaller mortgage on your house, so there's that extra every month including a higher mortgage rate due to worse LTV.
There's also all the ongoing costs of the flat.
There's CGT when you sell it.

And who knows what other costs will come in with a new government. If the current tories are clamping down, how well disposed to landlords do you think a labour government would be?

dimbo61

You are also a higher rate tax payer so the Tax changes makes it even more difficult to make a profit.
Changes to the main home relief would also hit you in the pocket when you do sell.
You might have £186,000 profit before selling and buying costs to put towards the new home.