Rules on buying a house and not living in it

bdubs32

Hi All,

I have a question about buying a house when I am not sure I will be living in it long-term.
I know there is already some great advice on this site and forum, but my situation is somewhat unique I think.

Since the pandemic hit, I have been working remotely and left London for the countryside. It is likely that my job will eventually require me to return to London, but who knows when? In the meantime, I would like to buy a property where I am currently living in the countryside.

My questions:

- Is it ok to buy a property here when I know there is a good chance I will need to move back to London at some point? My plan is to get a job that enables me to work remotely in the longer term, but I know that could still be a way off, and so it's unlikely the property would always be my main residence, at least for the next few years (although it probably would be for the next few months at least).

- If I do buy the property as my main residence, but then also subsequently rent somewhere in London, would that cause any problems with a mortgage provider? Or is it the case that they care only about your circumstances when you buy the property, and that you are paying your bills?

- If I had a family member move into the property should I leave it to return to London, and they pay me something as a kind of rent (though prob not market rates), I guess that would formally mean I should switch to a buy-to-let mortgage? Or is that permissible with a residential mortgage?

Thanks for any help you can provide. I have spoken to a mortgage broker already, but very keen for other opinions, as I don't want to break the law.

davidmcn

Surely a mortgage broker could answer these questions?

Anyway, a "normal" residential mortgage will invariably require you to use the property as your main residence. So if you want to cease doing that, you'd first need the lender's consent. And they might say no. If it remains your main residence, but you start, say, renting somewhere to stay in London during the week, that isn't something you would need to discuss with the lender.

AdrianC

There's no law against you letting the property out.

Yes, your mortgage lender will probably have an issue - and will certainly require you to either get CtL or switch to a BtL mortgage when you let it. They may not give CtL in the first few years, and they are likely to object to a family member as tenant.

greatcrested

bdubs32 said:

- Is it ok to buy a property here when I know there is a good chance I will need to move back to London at some point?

it is legally 'OK' but you'd be wise to plan carefully. What exactly would you do with the property? How would it stack up financially?

...... it's unlikely the property would always be my main residence, at least for the next few years (although it probably would be for the next few months at least).

- If I do buy the property as my main residence, but then also subsequently rent somewhere in London, would that cause any problems with a mortgage provider?

Possibly. It depends which property is your 'main residence'. A residential mortgage requires you to use the property as your 'main residence'. If the new property remains your main residence, and you stay in rental 4/5 days a week, that's fine.

Or is it the case that they care only about your circumstances when you buy the property, and that you are paying your bills? No. If your circumstances change and the property is nolonger your main residence, you would be in breach of your mortgage terms unless you got the lenders permission.

- If I had a family member move into the property should I leave it to return to London, and they pay me something as a kind of rent (though prob not market rates),

'kind of rent' does not legally exist. Either they pay rent, or they do not. If they do, they are a tenant.

This is true even if the rent is not money eg they agree to redecorate for you in return for the acommodation - that would constitute rent.

I guess that would formally mean I should switch to a buy-to-let mortgage? Or is that permissible with a residential mortgage? Either a BTL mortgage or Consent To Let (CTL) from the lender.

Buying a property is a long term commitment so ou need to fully consider all the 'what if' scenarios and make sure the legal and financial consequences of each scenario make sense.

bdubs32

Thanks for your responses. I posted here after speaking to a mortgage broker because the adviser told me no bank would care about me having a family member live in the property and contribute to the mortgage. All they would care about is that I pay the mortgage. I was a bit surprised by this because I assumed this payment would be treated as rent, and therefore might require me to have a buy-to-let mortgage instead.

It's a bit complicated because I would likely live in the property at least some of the time, but a family member would live there the whole time and make contributions to the mortgage (but it would only be me making the mortgage application).

NameUnavailable

It sounds like the familiy member would be a lodger rather than a tenant, if you still have access to the property (to stay at the weekend etc). Much less complicated.

Cakeguts

Any money that you get from a family member towards your mortgage will count as income and will need to be declared on your tax form.  You will need to work out if you can afford to pay a mortgage and all bills on the house and a rent in London.

GDB2222

bdubs32 said:

Thanks for your responses. I posted here after speaking to a mortgage broker because the adviser told me no bank would care about me having a family member live in the property and contribute to the mortgage. All they would care about is that I pay the mortgage. I was a bit surprised by this because I assumed this payment would be treated as rent, and therefore might require me to have a buy-to-let mortgage instead.

It's a bit complicated because I would likely live in the property at least some of the time, but a family member would live there the whole time and make contributions to the mortgage (but it would only be me making the mortgage application).

I think there would be no problem for the lenders if you live in the property as your main residence and have a family member as a lodger. They have more difficulty if you're not living there at all and the family member is a tenant.

MovingForwards

https://forums.moneysavingexpert.com/discussion/6230264/rules-on-family-living-in-property-when-you-are-not-there#latest

Not quite as straight forward as you're making it out to be in this thread, when you discuss your other idea in the above link.

It's so much easier if you stick to one thread with all the information.

greatcrested

Tiresome duplicate post.....