Buying into partners apartment / renting out own house

steve866

I own a property (~70% LTV) which I have recently rented out. I have consent to the let with the lender on my current repayment mortgage which is fixed until May 2027.

I have move in with my partner. She owns her apartment with a friend who has now moved out. The friend put down the initial £40k mortgage and they split the mortgage payments. Their deal is fixed for 4 more years with Natwest.

In the future, it might make sense for me to buy the friend out of my girlfriends apartment. I understand I would be liable for additional stamp duty.

I am questioning how my affordability would be considered with my house rented out, but on a repayment mortgage? I am also wondering if Natwest would allow me to replace the friend on the mortgage, assuming I covered the deposit, and if they would allow any further changes (for example a bigger deposit).

Thanks 

Emmia

I'd expect that when your current consent to let expires (is it limited to the length of your current fix?) that you'll need to switch to a buy to let mortgage, in order to keep renting it out.

That will involve a full mortgage application,  the property being able to make a certain amount of rent vs. the mortgage payment and how much equity you have then. (You might not be able to take out money from your current property to buy the friend out).

In terms of your current plans, if you pay your girlfriend "rent" you'll be starting to take equity in her and her friends property - depending on the footing of your relationship that may not be a good thing. Ideally you should split the bills like utilities, food etc.only, putting aside the money you'd pay in "rent" to allow you to move out quickly if things didn't work out.

Once your current place is tenanted you won't be able to move straight back in, you'll need to give notice etc., which can take some time. 

Finally are you familiar with all the legal obligations of being a landlord?

steve866

I am not paying my girlfriend rent. I am aware of the obligations of being a landlord. I have the deposit in cash if needed. I am more querying my borrowing options based on current situations and how easy it would be to buy our girlfriend’s friend and join mortgage. 

silvercar

If you have rental income that covers the mortgage on your let property, with some to spare for other costs, the lender assessing you for the mortgage on the place with your girl friend would be assessed on your earned income.

what arrangement you come to with the friend being bought out depends on what was agreed when the friend bought, if anything. If no agreement was made, you will all have to agree on what she should get. In her shoes I’d be looking to see if the property has increased in value.