Let to buy mortgage - need advice

oatcakes

Partner and I bought a 2 bed semi-detached in April 2021, 85% LTV.

Unfortunately due to a drastic change in personal circunstances we're now looking to buy a new-build 3 bed (price will be approximately £235k) when our fixed rate comes to an end in November 2022.

This house we bought is in a very good location and the vast majority of propreties around are rented, so I was wondering if instead of selling I could change my residential mortgage into a let product.

Has anyone have gone through this or has any idea of the costs involved?

Just to make it clear, I don't think affordability will be an issue, but then again I could be wrong.

Me and my partner have no dependents, no debt, no car payments, etc.. and have a combined total income of £80k per year.

Our mortgage is currently £430, which really, is nothing.. Even if we come across tenancy vacant periods we could easily be cover both mortgages.

Slithery

You mean BtL (buy to let).

Let to buy is when you rent someone else's property with the option of purchasing it later.

hazyjo

Slithery said:

You mean BtL (buy to let).

Let to buy is when you rent someone else's property with the option of purchasing it later.

It's not. Explained far better here than I could: https://www.which.co.uk/money/mortgages-and-property/home-movers/let-to-buy-explained-axb2g3h8hhx3

Slithery

hazyjo said:

Slithery said:

You mean BtL (buy to let).

Let to buy is when you rent someone else's property with the option of purchasing it later.

It's not. Explained far better here than I could: https://www.which.co.uk/money/mortgages-and-property/home-movers/let-to-buy-explained-axb2g3h8hhx3

Thanks. My mistake.

Bluebell1000

We did this 3 years ago. Went through a broker who sorted the let to buy mortgage and the mortgage for onward purchase. You will need at least 25% equity in your current house for ltb,  plus the deposit for your new property. You will also pay additional stamp duty. We moved the ltb mortgage onto interest only which keeps the cost down. There are a range of rules and regs for letting. Make sure you are aware of all those, and think about if you want to self manage or use an agency (10-15% of income would go on fees).  

AdrianC

hazyjo said:

Slithery said:

You mean BtL (buy to let).

Let to buy is when you rent someone else's property with the option of purchasing it later.

It's not. Explained far better here than I could: https://www.which.co.uk/money/mortgages-and-property/home-movers/let-to-buy-explained-axb2g3h8hhx3

The new euphemism for "accidental landlord".

OP - do you WANT to start a residential lettings business?
Have you got your figures worked out?
Will you be paying for management?
What assumptions have you made about bad debt, voids, repairs?
How much will need to spent to make the property lettable?
Are you capable of stepping back emotionally from "my house" to "my business asset, the tenants' home"?
Most importantly - how much net, post-tax profit does your business plan predict, and how long will that take to repay the £7k of the +3% SDLT on your purchase?