Buy to let

Ishy7899

Earlier this year my girlfriend bought a house with her life time isa it is a small 2 bed terrace and recently we have both had a substantial salary increase between us. We are looking at getting a family home and starting a family in the near future. We have seen a 3 bed semi and we are thinking about going for it but my question is what to do with our house we have now. wether to keep it and let it out or to sell it. 

We’re leaning more towards keeping it to let it but just wondering is there any complications with her buying it with her lifetime isa and having the house for such a short period of time also how does it work with the mortgage and changing to a buy to let. Also I have a lifetime isa and would be buying the new house with that am I still able to use that if we’re buying the house together. 

theartfullodger

What experience and/or education in being a landlord do either of you have?  If none don't start with training.

Emmia

It's vastly less complicated if you sell the first property and use the proceeds to buy the second.

Becoming a landlord means you've got to be able to cover both mortgages if there are no tenants or they refuse to pay, and keep up with a myriad of other requirements, certifications etc.

If the GF is on maternity leave, would your incomes cover both? Can you afford childcare if / when she goes back to work plus two mortgages (potentially). I think lots of people think being a landlord is easy, just buy a property get tenants and watch the money roll in... But it's not necessarily straightforward.

Save yourself the stress.

Albermarle

A recent similar sort of thread.

Rent out and rent new? Or sell and buy ... — MoneySavingExpert Forum

EssexHebridean

Things aren't going to get any easier for landlords any time in the near future - it's not something I'd want to go into these days. 

Stubod

..sell, sell sell.....you don't want to be a single property landlord.....IMHO

GrumpyDil

I own one BTL property which I have had for several years. It does ok but the rules and regulations and the changes to tenancies currently going through parliament means I definitely would not go into BTL now.

_Penny_Dreadful

Ishy7899 said:

Earlier this year my girlfriend bought a house with her life time isa it is a small 2 bed terrace and recently we have both had a substantial salary increase between us. We are looking at getting a family home and starting a family in the near future. We have seen a 3 bed semi and we are thinking about going for it but my question is what to do with our house we have now. wether to keep it and let it out or to sell it. 

We’re leaning more towards keeping it to let it but just wondering is there any complications with her buying it with her lifetime isa and having the house for such a short period of time also how does it work with the mortgage and changing to a buy to let. Also I have a lifetime isa and would be buying the new house with that am I still able to use that if we’re buying the house together. 

You’re not married so it’s not “our” house, it’s your girlfriend’s house. If she chooses to let the property all the rental income will be hers as will all the responsibilities of being a landlord. Your girlfriend would need to apply for consent to let as I assume she’s got a fixed rate mortgage deal. The lender may or may not agree since it hasn’t been her residence for very long. 

At the time of purchase your girlfriend would have signed a declaration that said something along the lines of, “on completion the property will be my only or main residence, or will become so as soon as its suitable for use,” in order to withdraw funds from her LISA. That appears to have been true at the time so she won’t be penalised by deciding to upsize at a later date. 

When you come to jointly purchase the 3-bedroom property you can use your LISA because you’re a first time buyer. However, the purchase will be subject to the higher rates of SDLT/LBTT/LTT as your girlfriend will be purchasing an additional residential property/dwelling.