should i convert to B2L?

adlad_2

Some expert advice please!

My wife owns a flat worth £250k with a mortgage for £145000. She bought this before we married and it is in her name. We rent it out to students at £1100pcm and have done for c.2yrs. The mortgage remains with Halifax at SVR under her maiden name and unchanged from when she lived there.

Halifax intially agreed to her renting it for one year. This expired some months ago and we have heard nothing (they keep taking the money of course!).

When she took the mortgage she was on a good salary but now is a proud mum and has no intention of going back to waht she did!!

SO...

Can we get a B2L mortgage on the rental income that will cost same/less than halifax SVR?

If we don't go to halifax and they don,t come to us..... (presum the worst is that they could turn round and cancel the mortgage at which point we would be forced to look else where regardless if it cost more?)

My income is c.50k which pays on 200k mortgage on £280 home - should we put both properties into both names?

Help and advice please!!

Thank-you

adlad

MarkyMarkD

Halifax are unlikely to strop at you continuing to pay SVR.

You probably can get a BTL mortgage at less than Halifax SVR, but not hugely less. But given the large size of the mortgage, I would have a look for a better rate elsewhere.

As she doesn't work, and presumably therefore doesn't pay tax, whilst you pay 40% if you earn £50k, there's no benefit that I can see to switching her property into your joint names. If you did, though, you could declare that it is held 99%:1% to minimise the tax impact. I personally would leave it in her name, though, as based on the <60% LTV and ample rental cover, you should be able to get a BTL in her name irrespective of income.

vansboy

If the property was/is jointly owned, don't the tax implications consider this to be a 50/50 arrangement, regardless how YOU feel it is owned.

Think I'd check a bit deeper before changing things.

VB

MarkyMarkD

No. You can elect for unequal shares, as I said.

The necessary IR form is here.

adlad_2

cheers markymarkd and vansboy for coming back so quickly.

The tax issue was as i thought - we should keep as much as poss in my wife's name.

Any recommendations for which B2L companies to approach?

i had wondered about getting a B2L lined up and then trying to remortgage at halifax - if they say no due to change of circumstances, no probs as B2L is waiting. Although to be fair the Halifax have been a pain previously so if B2L as cheap as Halifax remortgage i would be keen to move.

Anyway,.....more suggestion please!

adlad

MarkyMarkD

A quick search at Moneyextra shows that you could get a 5.35% rate from Cov B Soc which is far cheaper than your current Halifax SVR.

AFAIK Halifax don't do BTL so I would doubt them letting you switch product whilst still letting - but it's obviously worth a try. You could get a far better rate than 5.35% if it was residential rather than BTL.

It requires an income of >£20k so you would have to do this in joint names.

I should speak to the Halifax first - they are not going to repossess your house immediately (or rather your tenants' house).