Landlords who don’t own their own home.

Jonny50

I understand that generally, it’s not possible to get a buy-to-let mortgage on a property unless you already own your own home first. 

But does anyone know of any exceptions to this or any way around it? 

The deposit we’d need to buy a property for ourselves near friends & family would pay for an entire flat elsewhere in the country which could be rented out to someone. 

And we’d comfortably be able to cover the mortgage if we needed too between rental tenants (alongside the current rental costs we have). 

Owning a property to rent out elsewhere would be a good way to help us save towards a deposit living in the area we currently rent in, as there’s just no way we’ll ever be able to save for this from our wages alone, given the prices. 

We’ve looked around the surrounding area, but our choices seem to be living somewhere we won’t feel safe, or somewhere that won’t have the outdoor/indoor space we need. 

We are able to make savings each month, but they still don’t come anywhere near the amount needed to buy somewhere similar to what we currently rent (a very modest & small 2 bed flat with a small back garden). 

Does anyone know a way to own property, land, holiday let’s etc without first being a homeowner? 

Any advice gratefully received. 

canaldumidi

Well if you pay cash there's no obsticle - other than the normal business case to ensure it is actually worthwhile.

If you need a mortgage, then the best advice is to speak to an independant mortgage broker.

More here:

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

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

A little dated as G_M has been prevented from keeping it current.....

dimbo61

I have no idea about your circumstances but why do you think becoming a Landlord will help you save up the deposit to buy your own home ?
Do you know what's involved ?
Tax ? 
You could end up worse off than you are now.

user1977

Are you bearing in mind that you'll (a) lose first time buyer privileges (e.g. no SDLT concession if your first purchase isn't for you to live in, and you don't get to carry it over to your first "proper" home) and (b) have to pay the additional rate of SDLT (or equivalent) on your second purchase (assuming you still own the BTL property at that point)?

Richiem1987

Many in the Military live in Quarters or Single living accomodation and rent out their property, as its too far away, and if on a short tour, too costly to keep selling and moving, but usually you live in it first. You can still get a BTL without already being a homeowner as well, as confirmed by my broker when asked me.

Unless you are cash buying, being a LL doesn't make a lot of profit, as any profit received, you typically put aside for the property for maintenance and improvements, in order to reduce the tax liability. Also when on a BTL, you always attempt to overpay when the interest rate is low, as when it goes up, you can absorb the increases more, and keep rent competitive with the rest of the market (this also reduces tax liability). Doing this means you don't really see the returns from the rent until the Mortgage is paid off. Once the Mortgage is paid off, you can then use the following rental income to fund a new purchase. If you are savvy, you could pay off a Mortgage in 10 years with good yeilds, sell it, then use the proceeds as a big deposit on a new property with a smaller Mortgage. 

But it is not the best way to owning your own home in an area that you would like, unless you are in the Miltiary for example on subsidised rental rates.

theartfullodger

Don't own the home I live in (wife does, thus I am a "Lodger"...If she pre-deceases me her will leaves most to charities (moggies), plus other relatives, needing selling: I'll be homeless..... ah, bless.. 

Not been a problem: Lenders (when I last mortgaged/re-mortgaged ) were happy with evidence of income over £25k pa (various pensions), other assets and decent return on other B2L properties.  Oh & I was over 70 at last successful application - mortgage goes to age 85 IIRC, interest only.

deannagone

Have you considered investing the money you have rather than using it to buy then rent a low value property out (which will limit the sort of tenant you are able to attract)?

There is an investment board on here for advice.

canaldumidi

theartfullodger said:

Don't own the home I live in (wife does, thus I am a "Lodger"...

No you're not. Neither with nor without the " ".

woahsoah

Owning a property to rent out elsewhere would be a good way to help us save towards a deposit living in the area we currently rent in, as there’s just no way we’ll ever be able to save for this from our wages alone, given the prices. 

Have you looked at the tax + costs?

K_S

@jonny50 Limited to the mortgage aspect of your post - there are a good number of lenders that will offer BTL mortgages to non owner-occupiers including those that are First Time Landlords and First Time Buyers. It's not uncommon for clients renting in/around central London to invest in BTL properties in less expensive parts of the country.

Just to be clear, I don't have any comments on the investment part of your post.

london21

Jonny50 said:

I understand that generally, it’s not possible to get a buy-to-let mortgage on a property unless you already own your own home first. 

But does anyone know of any exceptions to this or any way around it? 

The deposit we’d need to buy a property for ourselves near friends & family would pay for an entire flat elsewhere in the country which could be rented out to someone. 

And we’d comfortably be able to cover the mortgage if we needed too between rental tenants (alongside the current rental costs we have). 

Owning a property to rent out elsewhere would be a good way to help us save towards a deposit living in the area we currently rent in, as there’s just no way we’ll ever be able to save for this from our wages alone, given the prices. 

We’ve looked around the surrounding area, but our choices seem to be living somewhere we won’t feel safe, or somewhere that won’t have the outdoor/indoor space we need. 

We are able to make savings each month, but they still don’t come anywhere near the amount needed to buy somewhere similar to what we currently rent (a very modest & small 2 bed flat with a small back garden). 

Does anyone know a way to own property, land, holiday let’s etc without first being a homeowner? 

Any advice gratefully received. 

As others have said its a huge sacrifice.

Roughly how much is the property you want for yourselves?

How much is the property you are looking to BTL?

Renting to tenants is not always straightforward, costs, such as tax, managing costs, void periods etc.

Some tenants do not make regular payments for example.

Worth thinking about carefully and going in fully informed.