Renting out investment property

RHemmings

BusyPinkZebra said:

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! 

I'm not suggesting that you'll find the best deal there. Just that you'll be able to find some possible lenders.

Before I gave up on the idea of having a mortgage, I was told that some policies without early redemption fees might only be available through brokers. 

propertyrental

Since you seem to be at an early stage in your decision-making, these may be helpful. A little out of date as G_M has been banned so is unable to keep the post current. However the information is largely accurate. Applies in England.

Post 2: Repairing Obligations: the law, common misconceptions, reporting/enforcing, retaliatory eviction & the new tenant protection (2015) plus the Homes (Fitness for Human Habitation) Act 2018

Post 3: Deposits: Payment, Protection and Return.

Post 4: Ending/renewing an AST: what happens when a fixed term ends? How can a LL or tenant end a tenancy? What is a periodic tenancy?

Post 5: Rent increases: when & how can rent be increased?

Post 6: Repossession: what if a LL's mortgage lender repossesses the property?

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

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

Post 9: Letting agents: how should a landlord select or sack?

Post 10: Lodgers: advice & links for landlords & lodgers

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An Assured Shorthold Tenancy (AST) can exist in 3 forms:

1) Fixed Term Tenancy. This has a start date, and either a 'Term' (eg 6 months, 12 months), or a specified end date. The Term can be any length from a few days to 7 years, although

i) a landlord cannot obtain possession via the courts in the first 6 months, meaning LLs rarely agree to offer Terms of less than 6 months, and

ii) a tenancy with a Term over 3 years must be Executed as a Deed.

2) Statutory Periodic Tenancy. This is created by statute (law) automatically when the fixed term ends, if the tenant does not leave, and if no other agreement exists (eg 1 above or 3ii below). 'Periodic' means it continues on a 'rolling' basis (usually monthly, but sometimes weekly or quarterly).

3) Contractual Periodic Tenancy. This can be created either:

i) from the start (ie the initial contract specifies a 'rolling' tenancy - there is no fixed term), or

ii) at the end of the fixed term, if that is what the original contract specified would happen when the fixed term ended.

Albermarle

Similar running thread.
Purchasing an Investment Property — MoneySavingExpert Forum