Own one property outright - would like to buy second to live in

forumuser81

Hi, I own one property outright (a mortgage free house, valued £200k) which my parents live in and they cover all bills and living costs.
I am currently living elsewhere on my own in a rented flat and would like to buy my own flat to live in which I will need to take a mortgage for.
Ideally I want to keep the house mortgage free as it is, and take a mortgage for the flat I plan to buy.
What is the best way to do this to ensure best mortgage offers and rates please?
(E.g. am I eligible for a first time buyer mortgage? Should I transfer the house back to my parents names instead?)
As I consider myself a first time buyer buying a flat for myself - but perhaps legally it looks like I’m buying a second property.

Thank you for any advice!

horsewithnoname

If you own a house and you are not selling it, then you are not a first time buyer. 

How did you come by your current home? Deprivation of assets might be something you’d need to look into depending on the answer to that 

Bookworm105

you are buying a second property = tax implications 

TheSpectator

Would we be right in assuming this was your parents property transferred to you without thinking through the future implications?

forumuser81

horsewithnoname said:

If you own a house and you are not selling it, then you are not a first time buyer. 

How did you come by your current home? Deprivation of assets might be something you’d need to look into depending on the answer to that 

Thanks. The house that is owned was my parents house which had around £80k mortgage remaining which I took on in my name to clear the mortgage. I.e. they sold it to me.
 

forumuser81

TheSpectator said:

Would we be right in assuming this was your parents property transferred to you without thinking through the future implications?

Yes it had been my parents property but I bought from them when there was still around £80k mortgage left. It has since been cleared and is now mortgage free and they live in it. Now I would like to buy a flat for myself while they remain in the mortgage free house.

forumuser81

Is an option to transfer the deeds of the house back to my parents, which would then mean I’m classed as a first time buyer when it comes to buying my own flat?

sammyjammy

Are you saying you purchased the house for the outstanding mortgage amount?  Even if you transfer it back you are not a first time buyer and never will be.

silvercar

forumuser81 said:

Is an option to transfer the deeds of the house back to my parents, which would then mean I’m classed as a first time buyer when it comes to buying my own flat?

You will be buying a home that increases the number of properties owned, so extra SDLT to pay, transferring it back to parents would mean you avoided extra SDLT.

However, you are not a first time buyer, having previously owned a home, so that may have implications for the amount of SDLT depending on value. I think there are a couple of lenders who may allow you a FTB mortgage in these circumstances.

forumuser81

sammyjammy said:

Are you saying you purchased the house for the outstanding mortgage amount?  Even if you transfer it back you are not a first time buyer and never will be.

Yes I purchased for the outstanding mortgage amount of £80k at that time.
Ok that clears that up, thanks!

TheSpectator

And if you transfer it back you will be liable to CGT.