Renting current property to buy another [Merged]

[Deleted User]

housebuyer143 said:

You can't have the money before you exchange. You will be in breach of the mortgage offer and the solicitor will not allow this. You will have to do them simultaneously on completion day. 
Why do you need the money before exchange? If you need an exchange deposit you will have to explain you can't get one and hope the other side agrees to this.

Thanks. This is the logistics we are trying to figure out. We have 5% we can offer at exchange so I will mention this all to my solicitor. Thanks 

[Deleted User]

Bookworm105 said:

pedantically you are looking for a Let To Buy (LTB) mortgage since you cannot get a Buy To Let (BTL) on a property you already own.

Thank you. So my financial advisor has sent through paperwork etc and it says buy to let from Barclays, is this incorrect? We have told him our position etc so do I need to question this?
Thank you

AskAsk

[Deleted User] said:

Bookworm105 said:

pedantically you are looking for a Let To Buy (LTB) mortgage since you cannot get a Buy To Let (BTL) on a property you already own.

Thank you. So my financial advisor has sent through paperwork etc and it says buy to let from Barclays, is this incorrect? We have told him our position etc so do I need to question this?
Thank you

As I had stated earlier, it does sound surprising that you are offered a buy to let on a property that you still live in.  I would double check and triple check, but I did not think it is possible.

My buyer had to get a bridging loan as they had to move out of their house before they can convert their mortgage to a buy to let.  So they had everything in place but there was gap between the conversion, and so this was covered with a bridging loan.  They only did that because they were smitten with the house and had offered £30,000 more than the asking price, but when I said I could not give them a month to put their house on the market, they were led by the estate agent to get a bridging loan.  To cover the bridging loan costs, they didn't have to offer the extra £30,000.

housebuyer143

AskAsk said:

[Deleted User] said:

Bookworm105 said:

pedantically you are looking for a Let To Buy (LTB) mortgage since you cannot get a Buy To Let (BTL) on a property you already own.

Thank you. So my financial advisor has sent through paperwork etc and it says buy to let from Barclays, is this incorrect? We have told him our position etc so do I need to question this?
Thank you

As I had stated earlier, it does sound surprising that you are offered a buy to let on a property that you still live in.  I would double check and triple check, but I did not think it is possible.

My buyer had to get a bridging loan as they had to move out of their house before they can convert their mortgage to a buy to let.  So they had everything in place but there was gap between the conversion, and so this was covered with a bridging loan.  They only did that because they were smitten with the house and had offered £30,000 more than the asking price, but when I said I could not give them a month to put their house on the market, they were led by the estate agent to get a bridging loan.  To cover the bridging loan costs, they didn't have to offer the extra £30,000.

You can, it's called a let to buy, where you get a BTL mortgage on your resi ready for when you exchange. Barclays do it, as do others. It's quite common but the condition is that they all complete simultaneously.

[Deleted User]

housebuyer143 said:

AskAsk said:

[Deleted User] said:

Bookworm105 said:

pedantically you are looking for a Let To Buy (LTB) mortgage since you cannot get a Buy To Let (BTL) on a property you already own.

Thank you. So my financial advisor has sent through paperwork etc and it says buy to let from Barclays, is this incorrect? We have told him our position etc so do I need to question this?
Thank you

As I had stated earlier, it does sound surprising that you are offered a buy to let on a property that you still live in.  I would double check and triple check, but I did not think it is possible.

My buyer had to get a bridging loan as they had to move out of their house before they can convert their mortgage to a buy to let.  So they had everything in place but there was gap between the conversion, and so this was covered with a bridging loan.  They only did that because they were smitten with the house and had offered £30,000 more than the asking price, but when I said I could not give them a month to put their house on the market, they were led by the estate agent to get a bridging loan.  To cover the bridging loan costs, they didn't have to offer the extra £30,000.

You can, it's called a let to buy, where you get a BTL mortgage on your resi ready for when you exchange. Barclays do it, as do others. It's quite common but the condition is that they all complete simultaneously.

Thanks. So we have the offer from Barclays via our financial advisor. I'll just ensure the solicitor is happy to complete them at the same time and negotiate a lower exchange deposit. 🤞🏼 
Thanks again 

propertyrental

You need to factor in all the expenses for the rental, as well as having a decent contingency fund to cover rent arrear/damage etc.

theartfullodger

What makes you think you will make money renting it out ?  Taking into account tax on rent, CGT (when you later sell), repairs, tenants-from-hell (or agents-from  ), tax increases from the next government etc etc etc?.

Do you have the financial and emotional reserves to cope with tenants -from-hell (or agents -from..)??

Done any training in how to be a landlord and/or landlord/tenant law ??  More than 100 laws or regulation.  If not, don't even start....

anselld

Why another thread?...

https://forums.moneysavingexpert.com/discussion/6530387/changing-residential-to-btl-to-free-up-deposit#latest

[Deleted User]

theartfullodger said:

What makes you think you will make money renting it out ?  Taking into account tax on rent, CGT (when you later sell), repairs, tenants-from-hell (or agents-from  ), tax increases from the next government etc etc etc?.

Do you have the financial and emotional reserves to cope with tenants -from-hell (or agents -from..)??

Done any training in how to be a landlord and/or landlord/tenant law ??  More than 100 laws or regulation.  If not, don't even start....

Thanks. I've done a lot of research and we have decided to go fully managed. 
To start with, we'd put all of the 'profit' (approx £300pcm -fees insurance tax etc) into an account for these reasons.
I don't believe we'll make money immediately, but if we keep it for 30+ years we'd plan to sell for retirement.

[Deleted User]

propertyrental said:

You need to factor in all the expenses for the rental, as well as having a decent contingency fund to cover rent arrear/damage etc.

We can manage this, luckily we have well paid jobs. We'd also get good insurance.