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    • Chris94
    • By Chris94 15th Apr 19, 7:34 AM
    • 34Posts
    • 0Thanks
    Renting old flat and converting to buy-to-let mortgage instead of selling... Is it feasible?
    • #1
    • 15th Apr 19, 7:34 AM
    Renting old flat and converting to buy-to-let mortgage instead of selling... Is it feasible? 15th Apr 19 at 7:34 AM
    I currently own 60% equity in my flat I bought a couple of years ago through a first time buyer scheme where the Scottish Government paid for the other 40% and they get 40% of the current valuation at the time I sell it or buy it out from them.

    I just got a new job which involves a 2hr return commute on the bus each day which isn't ideal, and have been thinking of moving closer to work in the foreseeable future if I think I'll be there a while.

    That said, the house prices in my area seem to have soared since I bought it in 2016. My 1-bed flat was 110k when I bought it and now similar properties in the area (including my street) are on the market for 130-145k. Supposedly the area I live is "up-and-coming" and it's becoming more desirable to live in.

    I feel it may be a worthwhile investment to keep hold of this flat, buy out the remaining equity, convert to a buy-to-let mortgage, and rent it out if I decide to move elsewhere and hopefully sell it for even more in the future. However, I'm not sure of the logistics of that. My new income would allow me to take out the full mortgage for my flat but not much more. For buy-to-let mortgages, do they assess your affordability on income and whether you already own property or not? Or will they just look at your credit score and the potential rental income?

    If anyone has any advice/experience from being in a similar situation, I'd be interested to hear too.

    Maybe I'm jumping the gun and trying to run before I can walk but it's something I'm interested in exploring.
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    • AdrianC
    • By AdrianC 15th Apr 19, 7:45 AM
    • 21,906 Posts
    • 20,631 Thanks
    • #2
    • 15th Apr 19, 7:45 AM
    • #2
    • 15th Apr 19, 7:45 AM
    BtL mortgages usually lend a maximum of 75% loan-to-value, and most lenders will want you to own your home in addition to the let property.

    Does it even make financial sense to let the property (paying a higher interest rate on the mortgage, and income tax on the profit) while renting somewhere else?

    If you think your flat has increased in value, crystallise that profit by selling it, and then buy a home for you to live in.
    • Chris94
    • By Chris94 15th Apr 19, 4:50 PM
    • 34 Posts
    • 0 Thanks
    • #3
    • 15th Apr 19, 4:50 PM
    • #3
    • 15th Apr 19, 4:50 PM
    What I mean is I would want to another place closer to work (not rent) and rent out my current flat, hence convert my existing mortgage to a buy-to-let mortgage.

    I don't have the income to meet the affordability criteria for much more than the current value of my existing flat though, based on standard mortgage lending criteria. This is why I'm unsure if it would be a viable option or not.

    I also want a back-up incase I change jobs again or have any reason to move back in the future.
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