Can i buy a house with a 5% deposit and then rent it out after 2 years whilst travelling?

harvoo

I have just seen that the government are trying to re offer 5% mortgages. I am planning on going travelling in 3 years and was wondering if i would be able to buy a house with a 5% deposit, live in it for 2 years and then rent it out whilst I’m away?

thanks

Comms69

Maybe, but it sounds like a terrible idea. 

dinkylink

In theory yes, but you would need to get permission from your mortgage lender. 

And before everyone else says it, do you really want to be a landlord, and know what it entails etc etc....

foxy-stoat

Very much doubt you will be allowed consent to let, so best you can do is rent out a room to a lodger and keep everything else as is, as no one will advice you to let it without consent from the lender in fear of being locked away for ever.

harvoo

Comms69 said:

Maybe, but it sounds like a terrible idea. 

Thanks for reply, why does it sound like a terrible idea?

Comms69

harvoo said:

Comms69 said:

Maybe, but it sounds like a terrible idea. 

Thanks for reply, why does it sound like a terrible idea?

Because you're not here to deal with any issues, which means you're paying someone to do it. 

You would only get CTL for 1 year, and then you'd have to swap to a BTL, but you dont have equity for that

And frankly if the tenants dont pay rent you have to cover a very high mortgage for 6-12 months.

Basically the reason you think this is a good idea, is why it's a bad idea. Being a landlord is not watching the money come in every month. 

numbercruncher8

Without further details nobody knows if it's a bad idea or not.
If you're only going for a year and need your place back to live in when you return, yes, it is a terrible idea.

foxy-stoat

You will not get consent to let without a greater LTV %.
Do you really want to become a landlord?
Have you crunched the numbers to be sure that it is worth renting it out?
If you decide to pay a letting company to manage it then it wont give you the income.
What are you going to do when you return to the UK, evicting tenants can be a long, expensive drawn out affair.
Doesn't sound like you have thought about it enough.

newsgroupmonkey_

harvoo said:

Comms69 said:

Maybe, but it sounds like a terrible idea. 

Thanks for reply, why does it sound like a terrible idea?

Because Comms69 suggest that everyone should sit out a section 21 (that's what you give someone when they want to move out) and tell the tenant to ask for thousands of pounds to do so.

Basically, during Covid, the Government have extended notice a Landlord (that's you in this case) must give from 2 months to 6 months. In addition, no courts are hearing cases right now and it's unlikely that you'd be able to evict a tenant much before 2022.

Now clearly, we're sitting in worst case scenario. But let's say you go off travelling for 2 years. Firstly, I hope you've got deep pockets, because not only will you be potentially liable for tax on the income, but it's unlikely to cover the cost of a mortgage. In addition, anything that goes wrong (boiler blew up, electric blows, roof falls down etc.) you're liable for and have to do quickly. Plus you'll have to pay management fees to someone.

Next up, you return from your travels. You've given a section 21 to the tenant, with 2 months notice. Except that they don't want to move out. And did you forget to get that gas safe fella to check your heating system? ooh dear, you're starting your section 21 again. Didn't fill it out properly? Oh noes, we're starting that yet again. that's 6 months notice you've given.

At which point, you then apply to the courts to get possession. Best scenario, that'll take 3 months. At which point, the tenant has decided to stop paying you, so you're really stuck, because you're trying to pay that mortgage too. The judge sees that the tenant has protected characteristics (mentally or physically disabled etc.) and decides to give them 6 weeks or more to get out.

You get my point. Accidental landlording is not something anyone would suggest. There are too many pitfalls. I'd be very surprised if you'd get consent to let. And if you're not actually resident, you can't play the lodger game (I've seen people try to play that card before too).

harvoo

newsgroupmonkey_ said:

harvoo said:

Comms69 said:

Maybe, but it sounds like a terrible idea. 

Thanks for reply, why does it sound like a terrible idea?

Because Comms69 suggest that everyone should sit out a section 21 (that's what you give someone when they want to move out) and tell the tenant to ask for thousands of pounds to do so.

Basically, during Covid, the Government have extended notice a Landlord (that's you in this case) must give from 2 months to 6 months. In addition, no courts are hearing cases right now and it's unlikely that you'd be able to evict a tenant much before 2022.

Now clearly, we're sitting in worst case scenario. But let's say you go off travelling for 2 years. Firstly, I hope you've got deep pockets, because not only will you be potentially liable for tax on the income, but it's unlikely to cover the cost of a mortgage. In addition, anything that goes wrong (boiler blew up, electric blows, roof falls down etc.) you're liable for and have to do quickly. Plus you'll have to pay management fees to someone.

Next up, you return from your travels. You've given a section 21 to the tenant, with 2 months notice. Except that they don't want to move out. And did you forget to get that gas safe fella to check your heating system? ooh dear, you're starting your section 21 again. Didn't fill it out properly? Oh noes, we're starting that yet again. that's 6 months notice you've given.

At which point, you then apply to the courts to get possession. Best scenario, that'll take 3 months. At which point, the tenant has decided to stop paying you, so you're really stuck, because you're trying to pay that mortgage too. The judge sees that the tenant has protected characteristics (mentally or physically disabled etc.) and decides to give them 6 weeks or more to get out.

You get my point. Accidental landlording is not something anyone would suggest. There are too many pitfalls. I'd be very surprised if you'd get consent to let. And if you're not actually resident, you can't play the lodger game (I've seen people try to play that card before too).

Thanks for all the replies.

The aim wouldn't be to make any money it is just to stop wasting money by paying rent over the next few years.
In terms of managing the property whilst I'm away I have a relative who is a gas certified engineer who is willing to manage the property for me for free.

When returning to the UK I wouldn't be interested in evicting the tenant and the house remain for rent

Thanks 

Comms69

newsgroupmonkey_ said:

harvoo said:

Comms69 said:

Maybe, but it sounds like a terrible idea. 

Thanks for reply, why does it sound like a terrible idea?

Because Comms69 suggest that everyone should sit out a section 21 (that's what you give someone when they want to move out) and tell the tenant to ask for thousands of pounds to do so.

Basically, during Covid, the Government have extended notice a Landlord (that's you in this case) must give from 2 months to 6 months. In addition, no courts are hearing cases right now and it's unlikely that you'd be able to evict a tenant much before 2022.

Now clearly, we're sitting in worst case scenario. But let's say you go off travelling for 2 years. Firstly, I hope you've got deep pockets, because not only will you be potentially liable for tax on the income, but it's unlikely to cover the cost of a mortgage. In addition, anything that goes wrong (boiler blew up, electric blows, roof falls down etc.) you're liable for and have to do quickly. Plus you'll have to pay management fees to someone.

Next up, you return from your travels. You've given a section 21 to the tenant, with 2 months notice. Except that they don't want to move out. And did you forget to get that gas safe fella to check your heating system? ooh dear, you're starting your section 21 again. Didn't fill it out properly? Oh noes, we're starting that yet again. that's 6 months notice you've given.

At which point, you then apply to the courts to get possession. Best scenario, that'll take 3 months. At which point, the tenant has decided to stop paying you, so you're really stuck, because you're trying to pay that mortgage too. The judge sees that the tenant has protected characteristics (mentally or physically disabled etc.) and decides to give them 6 weeks or more to get out.

You get my point. Accidental landlording is not something anyone would suggest. There are too many pitfalls. I'd be very surprised if you'd get consent to let. And if you're not actually resident, you can't play the lodger game (I've seen people try to play that card before too).

A s.21 is a landlord telling a tenant they plan to potentially evict at some point in the future. So not sure what i'm advising that isnt correct?....