Buying a house that is rented out, Do I have to pay the extra 3% stamp duty?

johnonymous

Also I should have mentioned that there will be no mortgage on the property, I made the last payment on my Flat in Warwick last year and am looking to only spend the same amount of the place in Plymouth.

grumiofoundation

johnonymous said:

Sorry for not being clearer. I was actually thinking of buying with tenants in situ despite it not being my preferance. My favourite properties are currently all being let out to students. Based on 4 months to complete I was thinking that having a rental income for two months before moving in would not be a huge deal unless this triggered a stamp duty surcharge. I had not considered the possibilty of problems taking possesion; thanks for the heads up on that.

How much will the property cost?
It may not trigger the +3% surcharge but you are losing out on FTB stamp duty relief (if applicable).

Are you buying with a mortgage? As posted above if so you will need a BTL mortgage (with higher deposit than residential needed) if tenants will be in situ . Most likely mortgage terms will prohibit you moving in so you may need to remortgage onto residential.

Why would you not just wait until the summer when students leave? 

Edit - just seen recent post

AdrianC

johnonymous said:

I was actually thinking of buying with tenants in situ despite it not being my preferance. My favourite properties are currently all being let out to students. Based on 4 months to complete I was thinking that having a rental income for two months before moving in would not be a huge deal unless this triggered a stamp duty surcharge. I had not considered the possibilty of problems taking possesion; thanks for the heads up on that.

Can you fund it? You would need, as said, a BtL mortgage. Hard to get without owning your own home.
Do you actually WANT to be a landlord?
What if the tenants don't leave, or trash the place, or...?

johnonymous

I was not wanting to be a Landlord and have never considered buying a property with tenants before. The fact that all of my favourite properties are listed as investor preferred and buy to let is frustrating and my first thoughts were that a short rental period would be a small problem to overcome to get one of the houses I liked. It is no exagerration to say that 80% of the properties in my desired area, at the desired price point and size are student lets.

AdrianC

But will you be able to finance the purchase...?

What sort of sale price are they?
What equity do you have?

moneysavinghero

AdrianC said:

But will you be able to finance the purchase...?

What sort of sale price are they?
What equity do you have?

I believe OP has already stated that they have sold their previous property and so will be a cash buyer.

SpiderLegs

moneysavinghero said:

AdrianC said:

But will you be able to finance the purchase...?

What sort of sale price are they?
What equity do you have?

I believe OP has already stated that they have sold their previous property and so will be a cash buyer.

We could probably do with knowing where they are going to live while the tenants are still there then.

GDB2222

johnonymous said:

I was not wanting to be a Landlord and have never considered buying a property with tenants before. The fact that all of my favourite properties are listed as investor preferred and buy to let is frustrating and my first thoughts were that a short rental period would be a small problem to overcome to get one of the houses I liked. It is no exagerration to say that 80% of the properties in my desired area, at the desired price point and size are student lets.

Don’t become a landlord. It’s a surprisingly steep learning curve. If you start the purchase process now, it will take several months anyway, particularly as all the conveyancers are working flat out to get their current cases through before the stamp duty holiday ends. So, you will be ready to exchange at about the same time as the students leave.

In any case, it should not really be a problem for landlords if you say that you won’t exchange until the property is vacant. I would run a mile from any who don’t agree to that. 

greatcrested

johnonymous said:

....I was actually thinking of buying with tenants in situ despite it not being my preferance. My favourite properties are currently all being let out to students. Based on 4 months to complete I was thinking that having a rental income for two months before moving in would not be a huge deal unless this triggered a stamp duty surcharge. I had not considered the possibilty of problems taking possesion; thanks for the heads up on that.

It's not just the problems of taking possession.

It is also the fact you will be a landlord. Paying tax on the rent; Complying with multiple legal landlord obligations; .......

Frankly, since you have clearly not considered that, it's a non-starter idea unless you are willing to spend both time and money learning what's involved, and then undertaking it.

Mahsroh

AdrianC said:

johnonymous said:

I was actually thinking of buying with tenants in situ despite it not being my preferance. My favourite properties are currently all being let out to students. Based on 4 months to complete I was thinking that having a rental income for two months before moving in would not be a huge deal unless this triggered a stamp duty surcharge. I had not considered the possibilty of problems taking possesion; thanks for the heads up on that.

Can you fund it? You would need, as said, a BtL mortgage. Hard to get without owning your own home.
Do you actually WANT to be a landlord?
What if the tenants don't leave, or trash the place, or...?

I would say “harder” (rather than "hard") to get without owning your own home. Yes, there are less options / lenders prepared to lend but generally it’s not particularly difficult in my experience. 

I’ve managed it, and got a rate of 2.38% whereas the broker said had I owned my residential home I’d have been looking at rates about 1.8%, but 2.38% isn’t exactly earth shattering in my opinion. That was with a 75% LTV. I think most brokers will find good options subject to credit checks. 

That said, I agree this plan is fraught with difficulties and not one I think the OP should be entertaining.