Buy to let mortgages and escaping the city

wynnigan

I'm hoping someone here may be able to help and that others may be interested in the answers.


The situation:


My partner and I own a property. Property is in London and worth around 250k. We are mortgage free the property is our home.



We are both on relatively low incomes (both work in the charity sector), probably less than 30k combined most years. Our savings are now almost non existent. A growing proportion of our income gets spent on bills, associated leasehold charges and the cost of living in London, generally.



We would like to leave London but are aware that selling, particularly now, is unlikely a prudent move.


What ways should be considered if we were to rent out the property to buy another in a much cheaper part of the country, paying off a mortgage primarily with the rental income generated by the flat in London? We don't have a deposit, or at least wont for a few years.



Is this a possible proposal?


Thank you in advance for any ideas! It's easy to feel stuck but we hope there may be a way!

ian1246

Sell up, take the £££ and buy yourself a lovely house in the countryside. Don't bother with buy to let - too risky!

I live in Herefordshire myself - £250,000 will easily buy you a lovely 2 or 3 bed detached house here in the fantastic countryside (or even 4 bed detached house in the city). Minimum wage alone (if working full time) between you, would give you a cracking income (£17,000+ each) considering you'd have no mortgage and very few bills (Council Tax is often less than £200 per month for most properties!). Just over 1 hour travel to Birmingham or Cardiff (closest "large" cities) and only 1hour 30minutes to the Sea :-)

That's just an example - I dare say there are numerous other places in the UK where your £££ from your house (even if you sold at a slightly discounted rate) could stretch very far, allowing you to live a mortgage free life with far more disposable income :-)

muhandis

In essence, what you want to do is let your property, take out a BTL mortgage on it and use the equity released as a deposit to buy a property in a cheaper area (presumably quite far away).

The fly in the ointment is that lenders are unlikely to give you a residential mortgage based on your current employment for a property that is too far away.

Maybe you could find jobs in the new area and then try the above?

Or let your flat out, rent a cheap place in the new area, find jobs and then do the above?

If you really really want to do it, it’s not an insurmountable problem.

wynnigan wrote: »

What ways should be considered if we were to rent out the property to buy another in a much cheaper part of the country, paying off a mortgage primarily with the rental income generated by the flat in London? We don't have a deposit, or at least wont for a few years.

Is this a possible proposal?

Thank you in advance for any ideas! It's easy to feel stuck but we hope there may be a way!

MortgageMamma

Don't get into renting out your property unless you can dedicate time and funds to it. Being a landlord these days is tough, not overly profitable and there are lots of legal obligations you have to make to your tenant. If the boiler went how would you pay for a new one? Broken window? new locks for a front door? tenant trashes house then moves out, you need new carpets, new wallpaper, new everything.

It happens a lot and more and more landlords are deciding its not worth it for the yields they get. There is a lot of protection for tenants from bad landlords but nothing for landlords to protect them against bad tenants.

Then you need to consider rental voids. If your tenant defaults on the rent there won't be enough in your pot to pay the mortgage and your living expenses for your own home.

Its a bad idea honestly

I think like others, sell up, move somewhere lovely with fresh air, good amenities and jobs. I live up North in Lancashire. Its not an affluent area where I live but there are jobs that are easy to come by and the houses are really cheap.

Good areas to consider are :

Buxton, Derbyshire (voted the 5 best place to live in the UK)
Skipton, North Yorkshire (just google it, its lovely)
Harrogate, North Yorkshire stunning, low crime rates best schools in UK

You generally find the further North you go the better the house prices if you go in the suburbs away from the cities. And I think the people are much nicer too. I've lived and worked in London and everyones in such a rush, everyones just a face there are so many people its mind boggling.

Up North life is a slower pace, you have time to get to know people and transport isn't as congested. And there are some quality charities to work for as well. I volunteer one afternoon a week at my local Barnardos sorting centre. I price up all the antiques for them and I love it.

wynnigan

Thanks so much for all the replies - really helpful!


We're going through options as we'd really need to pay around £10k to extend lease of current property if we were going to keep it beyond the next couple of years. Currently on 95.



Worry that selling up from London would mean an almost certain no return. Used to feel like London property was a great investment for life though prices are currently stagnant, if not falling.



Thanks again to all of you who have replied - much appreciated and very helpful indeed.

csgohan4

Sell up and buy a bigger place, you can live somewhere in south and still be close by London, Ashford in Kent is a good place 40 mins to St pancreas by train

I left London and never regretted it. The Rent was eating half my salary which was silly, bought a much bigger house here than a studio flat in London

AliceBanned

wynnigan wrote: »

Thanks so much for all the replies - really helpful!


We're going through options as we'd really need to pay around £10k to extend lease of current property if we were going to keep it beyond the next couple of years. Currently on 95.



Worry that selling up from London would mean an almost certain no return. Used to feel like London property was a great investment for life though prices are currently stagnant, if not falling.



Thanks again to all of you who have replied - much appreciated and very helpful indeed.

95 years left on the lease? That isn't urgently low at all. You don't need to do anything for a few years, say until 90 or less.


I think renting the flat out is a good idea and then you could move to a cheaper area in the countryside, if that's what you want, change jobs etc before buying again. London is still a good place to invest. Which area is the flat in? What type of rental income would it fetch? AS you have paid off your mortgage this might be a good option.