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    • Kj1006
    • By Kj1006 11th Jan 18, 9:22 PM
    • 5Posts
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    Kj1006
    Buying a buy to let when in employers accomodation
    • #1
    • 11th Jan 18, 9:22 PM
    Buying a buy to let when in employers accomodation 11th Jan 18 at 9:22 PM
    My boyfriend and I live in a house that is provided by his employer. We do not have to pay rent, council tax, water rates or for heating oil in this property. We are desperate to get in the property ladder but we have to live in the employers house for my boyfriends job. Would we be able to get a buy to let mortgage even though we are first time buyers? We would like to rent out the property until we are in a position to live in it ourselves. We currently pay £200 each into savings every month so would be able to contribute this each to a mortgage every month as well as any rental income that was generated. What is everyone's opinion?
Page 1
    • Slithery
    • By Slithery 11th Jan 18, 9:34 PM
    • 726 Posts
    • 1,132 Thanks
    Slithery
    • #2
    • 11th Jan 18, 9:34 PM
    • #2
    • 11th Jan 18, 9:34 PM
    If you are needing a mortgage then no, probably not.

    One of the conditions of most BtL mortgages is that you must already own a property.
    • Wyndham
    • By Wyndham 11th Jan 18, 9:48 PM
    • 2,022 Posts
    • 2,325 Thanks
    Wyndham
    • #3
    • 11th Jan 18, 9:48 PM
    • #3
    • 11th Jan 18, 9:48 PM
    Given what you have said, you don't own the property, so you can't borrow against it. Just to check, if your boyfriend changed jobs, would you lose the accommodation?

    You could have a separate property which you own yourselves, but would need to be able to fund the mortgage on that. £200 a month is unlikely to be enough to do that unless you also have a substantial deposit.
    • G_M
    • By G_M 11th Jan 18, 9:56 PM
    • 44,465 Posts
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    G_M
    • #4
    • 11th Jan 18, 9:56 PM
    • #4
    • 11th Jan 18, 9:56 PM
    Have you spoken to an independant mortgage adviser yet?
    • Kj1006
    • By Kj1006 11th Jan 18, 10:03 PM
    • 5 Posts
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    Kj1006
    • #5
    • 11th Jan 18, 10:03 PM
    • #5
    • 11th Jan 18, 10:03 PM
    No we don't own the property, yes if he left his job we would have to move out. In total we put away £400 a month together but could probably stretch this to £600. But don't see the point in having a house sat empty so would want to rent it out
    • cjdavies
    • By cjdavies 11th Jan 18, 10:21 PM
    • 3,364 Posts
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    cjdavies
    • #6
    • 11th Jan 18, 10:21 PM
    • #6
    • 11th Jan 18, 10:21 PM
    Do you know what laws as a landlord you must follow? What rights tenants have?
    • Wyndham
    • By Wyndham 11th Jan 18, 10:24 PM
    • 2,022 Posts
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    Wyndham
    • #7
    • 11th Jan 18, 10:24 PM
    • #7
    • 11th Jan 18, 10:24 PM
    No we don't own the property, yes if he left his job we would have to move out. In total we put away £400 a month together but could probably stretch this to £600. But don't see the point in having a house sat empty so would want to rent it out
    Originally posted by Kj1006
    But you can't, its not yours to rent out. Check your paperwork, there may be an exception because of the circumstances, but I think it's a no go.
    • Slithery
    • By Slithery 11th Jan 18, 10:27 PM
    • 726 Posts
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    Slithery
    • #8
    • 11th Jan 18, 10:27 PM
    • #8
    • 11th Jan 18, 10:27 PM
    @Wyndham

    I took the OP as meaning they were going to continue to live in the employers house, but purchase one of their own to let out.
    • Wyndham
    • By Wyndham 11th Jan 18, 10:32 PM
    • 2,022 Posts
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    Wyndham
    • #9
    • 11th Jan 18, 10:32 PM
    • #9
    • 11th Jan 18, 10:32 PM
    @Wyndham

    I took the OP as meaning they were going to continue to live in the employers house, but purchase one of their own to let out.
    Originally posted by Slithery
    Yes, thank you, I now think you're right and I misunderstood.

    In that case, OP, talk to a mortgage broker and see what they say.
    • thelem
    • By thelem 11th Jan 18, 10:40 PM
    • 717 Posts
    • 524 Thanks
    thelem
    We are desperate to get in the property ladder but we have to live in the employers house for my boyfriends job.
    Originally posted by Kj1006
    Why are you desperate to get "on the ladder"? Free rent and bills is a great benefit to be receiving, you should be happy about it.

    If you're not living in a property then it is just an investment like any other. Yes, many people have made good returns on property, but there are also many people who have lost money or have sold for what they paid. Being a landlord is a job in its own right, it's not a get rich quick scheme. When you come to want your own home, will your dream home at that time be the same property that makes a good rental investment now? I'd have thought you'd be looking for different things, so you'd only be looking to sell your rental investment anyway.

    It sounds like what you really want is to be able to afford to buy a home of your own when your no longer have the free accommodation. To do that you just need to have built up a suitable sum of money - it doesn't matter if that sum of money is in other property, a savings account, stocks and shares, gold or something else. Concentrate on putting away as much as you can afford each month, and putting that in an investment that gives a good return (see the Banking & Saving section of this site for advice).
    Note: Unless otherwise stated, my property related posts refer to England & Wales. Please make sure you state if you are discussing Scotland or elsewhere as laws differ.
    • 00ec25
    • By 00ec25 11th Jan 18, 10:51 PM
    • 6,515 Posts
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    00ec25
    Why are you desperate to get "on the ladder"? Free rent and bills is a great benefit to be receiving, you should be happy about it.
    Originally posted by thelem
    actually people living in tied/job related accommodation should be desperate to get on the ladder because when they cease to have the job they have no where to live and could be at an age where their options are then limited. Buying now whilst in work and able to pay towards a property just like they would if they were living in it is a sensible possibility. It is what many armed forces members do after all.

    OP as others have said, for a BTL the 2 things you are most likely to fail on are:
    a) most lenders require you to already own a residential property. The reason is to prevent you from buying on a BTL mortgage and then living in it yourself to circumvent the lending criteria for a residential mortgage. However, in your case because you live in work related accomm anyway you may be able to make a case to relax that rule

    b) BTL mortgages require big deposits, normally 25%+. You have not mentioned how much have you got and therefore whether you can realistically afford anything anyway? You have to buy it first before you start worrying about whether £400 pm will cover the repayments!

    My concern in this case though is £400 per month is chicken feed for a couple and if only £600 is "stretching it", then they need to speak to a mortgage broker urgently and have a reality check done before they get carried away with unaffordable ideas.
    Last edited by 00ec25; 11-01-2018 at 10:54 PM.
    • cjdavies
    • By cjdavies 12th Jan 18, 1:45 AM
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    cjdavies

    My concern in this case though is £400 per month is chicken feed for a couple and if only £600 is "stretching it", then they need to speak to a mortgage broker urgently and have a reality check done before they get carried away with unaffordable ideas.
    Originally posted by 00ec25


    I live alone and that I have just under that after paying all bills solo, something is definitely not right with most bills covered.
    • Gwendo40
    • By Gwendo40 12th Jan 18, 6:26 AM
    • 123 Posts
    • 127 Thanks
    Gwendo40


    I live alone and that I have just under that after paying all bills solo, something is definitely not right with most bills covered.
    Originally posted by cjdavies

    I was also at that... I also live alone, only work part time in an unskilled job, pay into a pension and I manage to save an average of £400 a month.
    • mr_munchem
    • By mr_munchem 12th Jan 18, 6:28 AM
    • 95 Posts
    • 33 Thanks
    mr_munchem
    Thatís what came to mind for me!

    OP are you both working? If so, what are you earning and what are you spending on thatís leaving you with £200-£300 each at the end of the month?!
    • Kj1006
    • By Kj1006 12th Jan 18, 8:13 PM
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    • 0 Thanks
    Kj1006
    We would want to rent out the property we purchase.

    We want to buy a house that we would live in eventually, it is not an investment property as such and would be somewhere we would move to. Also we live in a National Park where a small 2 bedroom property with a small yard is £245k, we want to try get somewhere before all the houses are snapped up for second homes and price increases get even worse!

    At the moment of course we could afford much more than £600 a month each, but we are trying to be realistic in that when we have a family for example we will not be over stretching ourselves when our income is less. We felt that that amount plus any rental income would cover the mortgage and go into a pot for any necessary repairs etc.
    • kingstreet
    • By kingstreet 12th Jan 18, 8:18 PM
    • 33,575 Posts
    • 18,212 Thanks
    kingstreet
    Typically you will need;-

    25% deposit

    monthly rent to be at least 140% of monthly mortgage interest at 5.5% per annum

    to be able to pass your chosen lender's residential affordability calculation for the purchase as it will try to ensure you aren't buying the property to live in...
    I am a mortgage broker. You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice. Please do not send PMs asking for one-to-one-advice, or representation.
    • Kj1006
    • By Kj1006 12th Jan 18, 8:18 PM
    • 5 Posts
    • 0 Thanks
    Kj1006
    @00ec25

    We have roughly £30k towards a deposit now.

    I own my own business and my partner is a gamekeeper. His wages is reduced because of the benefits of House etc.

    I am very cautious with my money and am maybe being over cautious.

    I do feel some of the posters are being very judgemental, we are new to this and are simply looking for advice not sarcastic comments about what some people can manage on their own! Good for you, we are just being cautious and trying to not over stretch ourselves
    • cjdavies
    • By cjdavies 12th Jan 18, 8:44 PM
    • 3,364 Posts
    • 3,593 Thanks
    cjdavies
    Do you know what laws as a landlord you must follow? What rights tenants have?
    Originally posted by cjdavies
    To repeat this, do you know?
    • 00ec25
    • By 00ec25 13th Jan 18, 10:19 AM
    • 6,515 Posts
    • 6,077 Thanks
    00ec25
    @00ec25

    We have roughly £30k towards a deposit now.
    Originally posted by Kj1006
    as mentioned, 25% deposit is the absolute minimum for BTL so the max you can afford to buy is property priced at 120k if you need to borrow the remaining 75%

    30/25 x 100 = 120 !

    can be done, random example:
    http://www.rightmove.co.uk/property-for-sale/property-57640324.html

    but that may not be the sort of place you want to end up in as your main home and in the meantime, even in the Lake district, a property that is suitable for letting is not necessarily one that you'd buy to live in, unless you are talking about the high end market (you are not)
    • joshiesaunt
    • By joshiesaunt 13th Jan 18, 10:58 AM
    • 51 Posts
    • 58 Thanks
    joshiesaunt
    I know someone in exactly the same position as you. It's a very good idea to get on the ladder whilst you are still in tied accommodation. Firstly, however, it will be nigh on impossible to get a BTL without an already existing mortgage/house. However, there are brokers who will be able to get you a residential mortgage with immediate permission to let as long as your employer is willing to say you will be living there eventually. My friend has a Nat West mortgage secured through a broker at 1.69%. Secondly, as others have said, you will need to really read up about becoming a landlord and your responsibilities re; gas safety etc. Get a good agent to manage it but have money set aside for unexpected repairs etc. You will need to pay tax and complete a tax return annually. One thing our friend found out is that the person on the tied accommodation license will not need to pay capital gains tax if you decide to sell the property (the rules are buried away in the HMRC book!).
    You will need a substantial deposit, stamp duty, fees etc.
    Good luck!
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