Two mortgages?

zjoliveira

I am currently paying the mortgage for a flat in London (paid around £150,000 out of £550,000 but we thinking of possible moving elsewhere. Is there any way that I can get a mortgage for another property without having to let go of my London flat? The idea would be to use the rent money for the London flat to pay for its mortgage and then pay for a separate mortgage of the new place at the same time. Is that even possible?
I assume that a buy-to-let cannot happen here, since I would be letting the property whose mortgage I already have and the new mortgage would be for the property we would be living in?

El_Torro

It is possible to get consent to let on your current residential mortgage. I did this a long time ago on a property. The bank increased the interest rate to do this, not sure if this is still common practice. Then when it comes time to remortgage you would need to get a buy to let mortgage.

Bear in mind that being a landlord is not always easy or risk free. Make sure you know what you are getting into before doing it. 

propertyrental

Obviously a lot depends on your finances/affordability.

Go and talk to a independent mortgage broker.

As for being a landlord, have you read the stickie?

https://forums.moneysavingexpert.com/discussion/5180214/tenancies-in-eng-wales-guides-for-landlords-and-tenants/p1

AlexMac

Given that you have the answer, above; that it's possible if you can persuade the lenders, the bigger question is, why let out this particular London flat?

If you really want to become a residential Landlord, is a London flat worth well north of half a Mil the best investment?  You'd need to be charging a rent of at least £3k- £4k a month to achieve a decent return, and possibly more given recent changes in tax treatment of Mortgage interest. 

In addition to mortgage costs (themselves well north of £2kper month at current rates?), you'll presumably have freeholder's Service charges, even if it's a shared freehold, plus maintenance, renewals, Gas Safety certificate costs, etc annually, as well as the cash and organisational resources to replace the odd boiler/ washing machine / dishwasher, etc immediately they bust? 

If you no longer live locally, you'll probably also prefer to engage an agent to find and reference-check tenants and issue the AST  rather than manage all that yourself- at a cost of 10-15% or more? (I've been letting out two little London BTLs  for 25 and 13 years respectively, but I bought them cheap as chips and know how to manage them myself.  I've also been lucky, with never a bad tenant, no damage, cannabis farms or other horror stories and hardly any no-rent void periods as I treat 'em right!  I recall having to instruct a plumber by phone, from holiday in Italy, to replace a boiler once; they don't last forever!  Neither of my two flats are worth anywhere near half a mil.  in fact they're probably only worth that in aggregate, and cos they were so cheap to buy 13-25 years ago, the mortgage is a small % of value, so the risk is less. 

I guess you've researched and spreadsheeted all that, so you're OK with the principle of being a landlord, but if so, why not simply sell in London, use some cash towards your new home and also buy one or two (much cheaper?) BTLs closer to where you plan to live, in an area with good rental demand and %return?   

But what do I know?  Good luck with the move 

kingstreet

A 'let to buy' sounds like a possibility subject to the estimated rental income. If enough, you may be able to increase the mortgage on the flat to have a smaller mortgage and hence lower loan to value on the new residential.

A decent broker will piece this together for you.

SDLT_Geek

zjoliveira said:

I am currently paying the mortgage for a flat in London (paid around £150,000 out of £550,000 but we thinking of possible moving elsewhere. Is there any way that I can get a mortgage for another property without having to let go of my London flat? The idea would be to use the rent money for the London flat to pay for its mortgage and then pay for a separate mortgage of the new place at the same time. Is that even possible?
I assume that a buy-to-let cannot happen here, since I would be letting the property whose mortgage I already have and the new mortgage would be for the property we would be living in?

If you buy another property in England, when keeping your previous home, you should budget for the extra 3% stamp duty land tax.

theartfullodger

You can have as many mortgages as you like (& lenders prepared to give).

I've had three at one point (currently just one small one).  Just depends on other assets, income & market feelings & mortgage costs.  Talk to a broker. Best talk to a couple.

But be prepared for things to get worse (they can..). I ended up paying 15% 1979 under Thatcher's iron handbag, having started at 10% I think 10 months earlier.  Things change - do some simple calculations of what you'd do if rates worsen, lose your job(s), family illness/crisis. 

It's just another set of financial gambles - sometimes they work out, sometimes they don't..