LET TO BUY
Letting to buy is the process of letting out the property that you currently live in to tenants, in order to buy a new home. It isn’t always possible to sell your home at a specific time or you may want to hold on to it as an investment for your future financial security.
The increasing demand for rented property is fuelling the increase in interest in letting to buy. Homeowners are realising that it can often be possible to rent out their property for considerably more than the mortgage they have to pay on it.
Unsurprisingly, the highest rise in let-to-buy numbers has been in the areas where more people rent properties.
Relocating for work purposes is a common reason for letting to buy, when you need to move away for a period of time but have the intention of returning to your property in the future. Letting to buy allows you to retain a home in your desired long term location.
Let to Buy Points to Remember
- In most circumstances let to buy mortgages are only available for a maximum of 75% of the new property's value. If you have an ample amount of equity tied-up in your existing home you may be able to release enough for the deposit on your new property.
- You will have to prove that your expected rental income satisfies the lenders rental stress testing.
- If you would prefer to buy another property it is possible to tale out two residential mortgages, but only if your existing mortgage lender provides you with official consent to let your current home before you purchase another.
Letting to buy can be a confusing and complex process. Becoming a Landlord is not for everyone and comes with its own set of potential pitfalls and requires significant thought and consideration. Securing a let to buy mortgage can be much more difficult than securing a standard mortgage, because there is a limited number of lenders, many of whom do not deal directly with borrowers. Please feel free to get in touch with us in either our Manchester or London office and we can help ensure that you achieve the most suitable mortgage for you and your specific requirements.