LISA and Buy to Let

Uffy2001 · 17 March at 1:35PM

Hello fellow MSE members!

So ive done a bit of googling and i haven't found any real answers to this question.

I have a LISA and im building it up to get a strong deposit for my first home but recently I've also starting to look at getting a mortgage for a Buy to Let property to get into the rental market.

My question is, if i get a buy to let mortgage and property with my cash will it effect my LISA (im not going to use my LISA or any cash thats in it). My understanding is it should not as this would be a property used for rental and not as my first home.

Does anyone know the answer to this or has done it?

Thanks!

Bookworm105 · 17 March at 2:48PM

practicality? I thought BTL mortgages still require the borrower to already own a residential property?
So your first step cannot be direct to owning a BTL but nothing else.

You would of course automatically lose your FTB status for SDLT when you then buy your residential home and would in fact have to pay additional rate stamp duty on that subsequent purchase. Added together that may cancel out any hope of cost effective use of your LISA money

housebuyer143 · 17 March at 2:54PM

Bookworm105 said:

practicality? I thought BTL mortgages still require the borrower to already own a residential property?
So your first step cannot be direct to owning a BTL but nothing else.

You would of course automatically lose your FTB status for SDLT when you then buy your residential home and would in fact have to pay additional rate stamp duty on that subsequent purchase. Added together that may cancel out any hope of cost effective use of your LISA money

Some lenders allow it without a residential but the pool is limited.

PRAISETHESUN · 17 March at 2:59PM

Nothing will happen to your LISA cash if you don't use it for your property purchase, but then since you'll no longer be a first-time buyer you won't be able to use that as one of the allowed reasons to access your money. That will leave you potentially waiting until retirement unless you accept you'll have to pay the 25% withdrawal penalty.