Buying A Second Property to Rent Out (to family firstly).

Snapelover

My husband and I are seriously considering buying a second property so that our son and daughter can have somewhere to live with cheaper rent than they currently both pay in their own flats so that they can save for their future.  They both plan to move on after renting for a few years so then we would be looking to rent out the property to any future tenants interested.
Which type of mortgage would we need to apply for?  We have no mortgage on our current property.

greatcrested

If you borrow against the property you plan to let, you'll need a BTLmortgage. But most prohibit letting to family!

Or you could borrow against your current property (so standard residential) and then be a cash buyer.

Now read the stickies:

Post 7: New landlords (1):advice & information :see links in next post

Post 8: New landlords (2): Essential links for further information

Post 9: Letting agents: how should a landlord select or sack?

Thrugelmir

You'll need to find lender offering regulated BTL mortgages. Start your search by using a mortgage broker. 

The rent you receive , after allowable deductions, will be taxable. Not just a question of your son and daughter paying the mortgage. If that was your intention. 

There'll also be second home stamp duty to pay. 

[Deleted User]

Id just borrow against the equity in your own home. Thats what I did. If you had enough money you could put the house in your sons name so you wouldn't have to pay second home stamp duty, or worry about capital gains tax as it would be his home and his house 

xylophone

Would you consider gifting a deposit so that they could buy together (assuming that they are willing to accept sharing for a few years before selling and moving on)?

Durban

Densol said:

Id just borrow against the equity in your own home. Thats what I did. If you had enough money you could put the house in your sons name so you wouldn't have to pay second home stamp duty, or worry about capital gains tax as it would be his home and his house 

No - don't put it in your sons name.  You will ruin his first time buyer status.

[Deleted User]

Durban said:

Densol said:

Id just borrow against the equity in your own home. Thats what I did. If you had enough money you could put the house in your sons name so you wouldn't have to pay second home stamp duty, or worry about capital gains tax as it would be his home and his house 

No - don't put it in your sons name.  You will ruin his first time buyer status.

I was assuming she was gifting the house to her son 

Durban

Densol said:

Durban said:

Densol said:

Id just borrow against the equity in your own home. Thats what I did. If you had enough money you could put the house in your sons name so you wouldn't have to pay second home stamp duty, or worry about capital gains tax as it would be his home and his house 

No - don't put it in your sons name.  You will ruin his first time buyer status.

I was assuming she was gifting the house to her son 

I don't think so. She says that when they move on she is going to rent it out to tenants