Updating post from Reddit.
I’m looking to buy my first home in a very in-demand area in the UK. I’m a non-res and have an ExPat mortgage set-up. I’m keen on buying so that I have a place of my own in the long term but am not particularly fussed about all the landlord business (not looking to scale and make this my first income).
Aside from the increased stamp duty as a non-resident, the 6 months of resi mortgage I have to pay before I can rent the property out, income taxes on rental income, gas and other safety certificates etc, is there anything I’m missing?
The way I see it, house prices are a precious commodity and I should make the most of it while I’m young enough and earning well enough to make this mortgage. The renters would ultimately be covering the mortgage. I plan on increasing rent in line with inflation YoY. I also plan on keeping the house is top condition as I am a genuine person and am maybe considering moving into the house at some point.
Is this a stupid plan? Am I underestimating the work required in being a landlord? In the long term, my view is that houses will continue to appreciate. This could mean than in ten years my rental income will be significantly more than the mortgage. Lastly, if I get a resi mortgage now and then a BTL in 3 years, would that be favourable? Will I be able to convert it back to resi if I want to live there at some point?
Buying a house in a private name is a tax nightmare in the UK and it looks like it’ll get worse! See what the up coming budget is like before looking into this any further
Thank you for the tip!
buy somewhere else. property prices don’t increase as fast as you’d want like they do in other countries
Another point to consider are the changes coming to rental laws, and how often you want to move back in.
Evictions are now limited to a set number of conditions.
While one of which is the landlord moving back into the property, there are restrictions on this:
Cannot use this ground within the first 12 months of the lease
Requires 4 months notice to the tenant
If the ground is used, you cannot relet the property for 12 months. Breaking this results in a possible RRO (rent repayment order, being expanded to a maximum of 3 years worth of rent) and/or fine (£5k, increasing to £30k for repeat offences)
So you’ll probably want to consider this if you’re wanting to occupy the property as well
Was not aware, thank you so much!
You won’t be able to rent after 6 months.
From the perspective of the bank, I can request a permission to rent but only after 6 months. From the perspective of finding a tenant, yeah I agree there’s no guarantee.
They are not obligated to grant it, and if they think you're deliberately evading getting a buy to let mortgage then they won't. Usually they do it when people bought the property to live in but then had to move away temporarily.
Completely appreciate that. I spend 50% of my time in the Uk, 50% abroad for work.