Renting out investment property

BusyPinkZebra

Hello, hope you are all well!

I am looking for some advice please on how to navigate an issue that has caused me much confusion.

I am recently married and currently living in a house that my husband owns (bought it before we even met). The house and mortgage are in his sole name.

I really want to buy a property of my own to have an investment and also a bit of a nest egg.

What I am confused about is:

1) I know that you cannot get a buy to let mortgage on your first property purchase

2) I know that you cannot rent out a property which has a residential mortgage on it, without permission from the lender.

3) My understanding is that lenders only give permission for you to rent on a residential mortgage only if you can meet criteria for an 'exception' and that even then they only give permission on a temporary basis for 'temporary situations' (i.e. I am moving abroad for a year).

Sooo...do I have any route whatsoever to buying a small investment property by myself (wanting to take advantage of my first time buyer perks) and be able to rent that out without getting into sticky waters with my lender? I feel like there must be a way as surely many women (or men!) do this?

_Penny_Dreadful

BusyPinkZebra said:

Hello, hope you are all well!

I am looking for some advice please on how to navigate an issue that has caused me much confusion.

I am recently married and currently living in a house that my husband owns (bought it before we even met). The house and mortgage are in his sole name.

I really want to buy a property of my own to have an investment and also a bit of a nest egg.

What I am confused about is:

1) I know that you cannot get a buy to let mortgage on your first property purchase

2) I know that you cannot rent out a property which has a residential mortgage on it, without permission from the lender.

3) My understanding is that lenders only give permission for you to rent on a residential mortgage only if you can meet criteria for an 'exception' and that even then they only give permission on a temporary basis for 'temporary situations' (i.e. I am moving abroad for a year).

Sooo...do I have any route whatsoever to buying a small investment property by myself (wanting to take advantage of my first time buyer perks) and be able to rent that out without getting into sticky waters with my lender? I feel like there must be a way as surely many women (or men!) do this?

1) That’s not necessarily true. There are lenders who will consider BTL mortgages for people in your situation. 

2 and 3) You wouldn’t be eligible for a residential mortgage that you have no intention of residing in. People can get consent to let with residential mortgages but as you are not eligible for a residential mortgage to purchase a property you have no intention of residing in it’s a moot point. 

What FTB perks do you think you are eligible to receive? Not the FTB SDLT relief because you have no intention of residing in the property as your only or main home. Not a HTB ISA or LISA bonus for the same reasons as you are not eligible for the FTB SDLT relief. You will face paying the higher rate of SDLT/LTT/LBTT though as your spouse already owns a property. 

RHemmings

_Penny_Dreadful said:

BusyPinkZebra said:

Hello, hope you are all well!

I am looking for some advice please on how to navigate an issue that has caused me much confusion.

I am recently married and currently living in a house that my husband owns (bought it before we even met). The house and mortgage are in his sole name.

I really want to buy a property of my own to have an investment and also a bit of a nest egg.

What I am confused about is:

1) I know that you cannot get a buy to let mortgage on your first property purchase

2) I know that you cannot rent out a property which has a residential mortgage on it, without permission from the lender.

3) My understanding is that lenders only give permission for you to rent on a residential mortgage only if you can meet criteria for an 'exception' and that even then they only give permission on a temporary basis for 'temporary situations' (i.e. I am moving abroad for a year).

Sooo...do I have any route whatsoever to buying a small investment property by myself (wanting to take advantage of my first time buyer perks) and be able to rent that out without getting into sticky waters with my lender? I feel like there must be a way as surely many women (or men!) do this?

1) That’s not necessarily true. There are lenders who will consider BTL mortgages for people in your situation. 

2 and 3) You wouldn’t be eligible for a residential mortgage that you have no intention of residing in. People can get consent to let with residential mortgages but as you are not eligible for a residential mortgage to purchase a property you have no intention of residing in it’s a moot point. 

What FTB perks do you think you are eligible to receive? Not the FTB SDLT relief because you have no intention of residing in the property as your only or main home. Not a HTB ISA or LISA bonus for the same reasons as you are not eligible for the FTB SDLT relief. You will face paying the higher rate of SDLT/LTT/LBTT though as your spouse already owns a property. 

CompareTheMarket agrees with @_Penny_Dreadful

https://www.comparethemarket.com/mortgages/first-time-buyer-buy-to-let-mortgage/

It should be possible to 'Start Comparing' and find some lenders that will lend to a FTB for BTL. 

theartfullodger

Talk to a couple of BTL mortgage brokers (google is your friend).

What makes you think buy a property to rent out is a wise investment strategy??  Do you have the financial and emotional reserves to cope with the tenant-from-hell (or agent-from) who doesn;t pay for say 7 months whilst you (must ) pay mortgage and legal fees and court costs - and might not get the place back when you think you should??

BusyPinkZebra

_Penny_Dreadful said:

BusyPinkZebra said:

Hello, hope you are all well!

I am looking for some advice please on how to navigate an issue that has caused me much confusion.

I am recently married and currently living in a house that my husband owns (bought it before we even met). The house and mortgage are in his sole name.

I really want to buy a property of my own to have an investment and also a bit of a nest egg.

What I am confused about is:

1) I know that you cannot get a buy to let mortgage on your first property purchase

2) I know that you cannot rent out a property which has a residential mortgage on it, without permission from the lender.

3) My understanding is that lenders only give permission for you to rent on a residential mortgage only if you can meet criteria for an 'exception' and that even then they only give permission on a temporary basis for 'temporary situations' (i.e. I am moving abroad for a year).

Sooo...do I have any route whatsoever to buying a small investment property by myself (wanting to take advantage of my first time buyer perks) and be able to rent that out without getting into sticky waters with my lender? I feel like there must be a way as surely many women (or men!) do this?

1) That’s not necessarily true. There are lenders who will consider BTL mortgages for people in your situation. 

2 and 3) You wouldn’t be eligible for a residential mortgage that you have no intention of residing in. People can get consent to let with residential mortgages but as you are not eligible for a residential mortgage to purchase a property you have no intention of residing in it’s a moot point. 

What FTB perks do you think you are eligible to receive? Not the FTB SDLT relief because you have no intention of residing in the property as your only or main home. Not a HTB ISA or LISA bonus for the same reasons as you are not eligible for the FTB SDLT relief. You will face paying the higher rate of SDLT/LTT/LBTT though as your spouse already owns a property. 

Thank you - this is actually incredibly helpful information, and lots of things I wasn't aware of! 

BusyPinkZebra

RHemmings said:

_Penny_Dreadful said:

BusyPinkZebra said:

Hello, hope you are all well!

I am looking for some advice please on how to navigate an issue that has caused me much confusion.

I am recently married and currently living in a house that my husband owns (bought it before we even met). The house and mortgage are in his sole name.

I really want to buy a property of my own to have an investment and also a bit of a nest egg.

What I am confused about is:

1) I know that you cannot get a buy to let mortgage on your first property purchase

2) I know that you cannot rent out a property which has a residential mortgage on it, without permission from the lender.

3) My understanding is that lenders only give permission for you to rent on a residential mortgage only if you can meet criteria for an 'exception' and that even then they only give permission on a temporary basis for 'temporary situations' (i.e. I am moving abroad for a year).

Sooo...do I have any route whatsoever to buying a small investment property by myself (wanting to take advantage of my first time buyer perks) and be able to rent that out without getting into sticky waters with my lender? I feel like there must be a way as surely many women (or men!) do this?

1) That’s not necessarily true. There are lenders who will consider BTL mortgages for people in your situation. 

2 and 3) You wouldn’t be eligible for a residential mortgage that you have no intention of residing in. People can get consent to let with residential mortgages but as you are not eligible for a residential mortgage to purchase a property you have no intention of residing in it’s a moot point. 

What FTB perks do you think you are eligible to receive? Not the FTB SDLT relief because you have no intention of residing in the property as your only or main home. Not a HTB ISA or LISA bonus for the same reasons as you are not eligible for the FTB SDLT relief. You will face paying the higher rate of SDLT/LTT/LBTT though as your spouse already owns a property. 

CompareTheMarket agrees with @_Penny_Dreadful



It should be possible to 'Start Comparing' and find some lenders that will lend to a FTB for BTL. 

Oh brilliant! Thank you! 

Albermarle

On the surface it would seem better to use any spare funds to save/invest/add to pension, rather than getting into BTL.
Renting out properties is more suited to experienced landlords ( who have more than one property to dilute risk) and/or builders/developers/good DIYers, who can save costs but doing up/maintaining properties themselves.

You can build up a nest egg, without getting involved in rental properties.

BusyPinkZebra

theartfullodger said:

Talk to a couple of BTL mortgage brokers (google is your friend).

What makes you think buy a property to rent out is a wise investment strategy??  Do you have the financial and emotional reserves to cope with the tenant-from-hell (or agent-from) who doesn;t pay for say 7 months whilst you (must ) pay mortgage and legal fees and court costs - and might not get the place back when you think you should??

what makes you think I don't have the emotional and financial reserves to cope with it?  

Grumpy_chap

BusyPinkZebra said:

Hello, hope you are all well!

I am looking for some advice please on how to navigate an issue that has caused me much confusion.

I am recently married and currently living in a house that my husband owns (bought it before we even met). The house and mortgage are in his sole name.

I really want to buy a property of my own to have an investment and also a bit of a nest egg.

What I am confused about is:

1) I know that you cannot get a buy to let mortgage on your first property purchase

2) I know that you cannot rent out a property which has a residential mortgage on it, without permission from the lender.

3) My understanding is that lenders only give permission for you to rent on a residential mortgage only if you can meet criteria for an 'exception' and that even then they only give permission on a temporary basis for 'temporary situations' (i.e. I am moving abroad for a year).

Sooo...do I have any route whatsoever to buying a small investment property by myself (wanting to take advantage of my first time buyer perks) and be able to rent that out without getting into sticky waters with my lender? I feel like there must be a way as surely many women (or men!) do this?

I don't know why you  think (1).  Lenders may have their own rules, but there is no fundamental reason why you cannot have a BTL on your first property purchase.

You are correct at (2) that you cannot rent out a property with a residential mortgage without the lender's permission.

You are also correct at (3) that you usually cannot buy a property under a residential property and then immediately get permission to let.  The lender is likely to assess that BTL was always the intention and may even review whether fraudulent statements may have been made to obtain the loan.

If a lender agrees "consent to let" on residential mortgage, there is often an adjustment to the interest rate payable to match BTL rates.

It should be possible to obtain a BTL mortgage.  You may need to go via a Broker.  You will likely require 25% deposit.  You will need to demonstrate the rent covering costs and / or other income which allows "top slicing".  The interest rate will be higher than for residential mortgage.

What FTB perks are you thinking of?  You will not be eligible for the FTB SDLT as you are not buying your own property to live in plus you are married and the married unit (you and your husband) already own a property.  You will be liable for the second property SDLT surcharge.

There are many women and men that do this.
They simply obtain the proper BTL mortgage and pay the relevant SDLT.

You could possibly have purchased the house prior to your recent marriage, as your primary residence, benefitted from FTB SDLT and avoided the SDLT surcharge.  I assume you are not wishing to divorce your husband to be eligible for these things again.

Have you researched the obligations of a landlord?

BusyPinkZebra

Grumpy_chap said:

BusyPinkZebra said:

Hello, hope you are all well!

I am looking for some advice please on how to navigate an issue that has caused me much confusion.

I am recently married and currently living in a house that my husband owns (bought it before we even met). The house and mortgage are in his sole name.

I really want to buy a property of my own to have an investment and also a bit of a nest egg.

What I am confused about is:

1) I know that you cannot get a buy to let mortgage on your first property purchase

2) I know that you cannot rent out a property which has a residential mortgage on it, without permission from the lender.

3) My understanding is that lenders only give permission for you to rent on a residential mortgage only if you can meet criteria for an 'exception' and that even then they only give permission on a temporary basis for 'temporary situations' (i.e. I am moving abroad for a year).

Sooo...do I have any route whatsoever to buying a small investment property by myself (wanting to take advantage of my first time buyer perks) and be able to rent that out without getting into sticky waters with my lender? I feel like there must be a way as surely many women (or men!) do this?

I don't know why you  think (1).  Lenders may have their own rules, but there is no fundamental reason why you cannot have a BTL on your first property purchase.

You are correct at (2) that you cannot rent out a property with a residential mortgage without the lender's permission.

You are also correct at (3) that you usually cannot buy a property under a residential property and then immediately get permission to let.  The lender is likely to assess that BTL was always the intention and may even review whether fraudulent statements may have been made to obtain the loan.

If a lender agrees "consent to let" on residential mortgage, there is often an adjustment to the interest rate payable to match BTL rates.

It should be possible to obtain a BTL mortgage.  You may need to go via a Broker.  You will likely require 25% deposit.  You will need to demonstrate the rent covering costs and / or other income which allows "top slicing".  The interest rate will be higher than for residential mortgage.

What FTB perks are you thinking of?  You will not be eligible for the FTB SDLT as you are not buying your own property to live in plus you are married and the married unit (you and your husband) already own a property.  You will be liable for the second property SDLT surcharge.

There are many women and men that do this.
They simply obtain the proper BTL mortgage and pay the relevant SDLT.

You could possibly have purchased the house prior to your recent marriage, as your primary residence, benefitted from FTB SDLT and avoided the SDLT surcharge.  I assume you are not wishing to divorce your husband to be eligible for these things again.

Have you researched the obligations of a landlord?

Thank you, you have given me a lot of new information that I was not aware of, so this has been super useful! 

MEM62

BusyPinkZebra said:

I really want to buy a property of my own to have an investment and also a bit of a nest egg.

Why are you looking at property as an investment?  It is illiquid, high risk, heavily taxed and legislation is ant-landlord in many areas.  There are many other investments that would bring you better returns with less risk.

BusyPinkZebra said:1) I know that you cannot get a buy to let mortgage on your first property purchase

You may find that this is not correct.