Updating post from Reddit.
Hi all
This might be an incredibly stupid question and if it is I'm very sorry for asking!
But just as I got with my girl friend (now fiance) she was in the process of buying a studio flat in west london on the Elizabeth line.
The location is amazing - can be in Heathrow airport in 20 mins or Tottenham court road in 20 mins.
its so handy, the location is too good to give up. It's just a pity about the size.
We would like to upsize but are exploring the possibility of keeping this studio flat as an investment. The great location also would be ideal if we were to ever leave london (A possibility with the current prices) and needed somewhere to stay for trips back into London.
Im aware of the changes in Stamp duty and the increased costs this will be and having done a rough check on figures it would easily be £50k to pay into stamp duties to keep this property.
We constantly are getting letters in the post from the big estate agents looking for additional properties to rent stating that they are seeing exponential demand for rental properties - particularly from people over seas. They are all renting multiple flats in our building
In these letters they have the rental prices we could expect for our flat type.
Which made me think. If letting agents are struggling to find sufficient properties and the stamp duty is too high for a young couple to realistically afford would it be too much to ask for a letting company to loan us the stamp duty in advance for the property. They could then take the repayments say over the course of 2 years until the stamp duty is repaid?
I understand then that we would have to pay the extra money of the mortgage each month and we would also have the risk of not being able to afford it (i think we would be able to manage this for 2 years) combined with costs associated with insurances etc. But the great location of the flat really is very hard to give up and it would be sore for the both of us to completely leave the area.
The letting agent would then be taking on the risk of rent not being paid for the 2 years and also the upfront pay out may not suit with cash flow etc.
But can someone please advise on how plausible this would be?
I haven't mentioned it to my partner but in my (inexperienced) mind it can work out and it really has me thinking of what could be.
Is it doable? Or is there any other viable ways of paying of the stamp duty apart from saving the money ourselves?
Thanks in advance:)
Run the tax figures on this income; then you'll see why landlords are leaving the market and rentals are in high demand
I doubt any agent will pay your stamp duty that is such a big risk even if you sign a contract that allows them to rent it out. It will also piss off your mortgage lender or potentially breach it as it will put an extra party into the mix (lenders do not like this). Let's say you somehow manage to do it Imagine if things go wrong and you hand keys back to lenders then they still wouldn't be able to sell it with the extra party involved. Also this is venturing into rent2rent which can end up being a huge issue when things go wrong. Agents want your property for their 10-20% monthly commission they don't want to spend money or take risk to do this else they'd be buying all the properties to rent out themselves.
Also look at the implications of when you’re married. I’m in Wales and its Land Transaction Tax here. My wife owns a property and if I bought one, It would not be classed as a first time buyer so would have to pay tax.
I think you are falling for the spam. Since I moved to UK 10 years ago I've had the same, fixed amount of "we're looking for properties in this area" kind of trash in our mailbox. Valuations have constantly been over-estimated and agents have been constantly under-interested.
It's not true they are in a crush and thus they wouldn't make a particular effort to get you onboard.