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Buy to Let or Residential Mortgage Route
Hi All,Apologies if this topic has been discussed before.
Been in the Middle East for last four years and intending to stay for another 2-3 years before going back to the UK. I have been contemplating on buying a residential property in South East of England. Have been in touch with couple of Mortgage Brokers and have a fair idea of the rates for the two mortgage options , i.e. BTL and Residential. I am not been able to decide if I should opt for BTL while I am abroad and buy a property now which will become home on our return or should wait for couple of years, hold back the savings and apply for Residential Mortgage. One difficulty in Residential Mortgage which I see is that my income will be low in UK (compared to here) which will have impact on how much I can borrow. Any advice would be much appreciated. Thank You in advance. |
Re: Buy to Let or Residential Mortgage Route
Others may have different views but if you can afford it buy now. You’ll have the rental income and you can carry on saving .... a win double. |
Re: Buy to Let or Residential Mortgage Route
You will pay much higher Stamp Duty on BTL mortgage, keep this mind. Prices looks like will be stable in South East for next 2-3 years so if I were you I would wait until you back home and apply for Residential mortgage. If this is your first and only property you can be able to apply for Help to Buy which should help you with lower income as it might cover up to 40% of your mortgage in London area.
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Re: Buy to Let or Residential Mortgage Route
Originally Posted by kostik3000
(Post 12547167)
You will pay much higher Stamp Duty on BTL mortgage, keep this mind. Prices looks like will be stable in South East for next 2-3 years so if I were you I would wait until you back home and apply for Residential mortgage. If this is your first and only property you can be able to apply for Help to Buy which should help you with lower income as it might cover up to 40% of your mortgage in London area.
A stable market (if there is such a thing :) ) still means prices will likely creep up and you will have to bridge that gap. Higher rate stamp duty shouldn't apply if you only have one property (AFAIK) I'm sure someone will correct if I've got that wrong. |
Re: Buy to Let or Residential Mortgage Route
Originally Posted by UKMS
(Post 12547177)
One of many downsides (IMHO) of this route and a big restriction on choice is that the property has to be a new build and from what I'm seeing many new builds available under the scheme are a little over priced (because they know you are getting assisted).
A stable market (if there is such a thing :) ) still means prices will likely creep up and you will have to bridge that gap. Higher rate stamp duty shouldn't apply if you only have one property (AFAIK) I'm sure someone will correct if I've got that wrong. Agree about New builds but I've been buying only new builds so far and currently there are a lot of deals going around and you can push developers quite a bit even for Help to Buy properties. Provided you get up 40% worth of your home for free for 5 years, it's compromise worth taking, in my mind. |
Re: Buy to Let or Residential Mortgage Route
Originally Posted by kostik3000
(Post 12547182)
Any BTL mortgages will attract higher Stamp Duty as it's assumed it won't be your main permanent address, regardless if you only have one property or many. The difference could run into well about 10,000s and more .
A property purchased this month at £500k by a first time individual buyer (only property owned) would attract SDLT of £10k if it was your main residence and £15k if BTL ..... a £300k property would attract SDLT of £0 and £5k respectively. |
Re: Buy to Let or Residential Mortgage Route
Thanks for the responses and discussion. I will not be able to avail the benefit of first time buyer because I have a property outside UK. Therefore, whether it is Residential or Buy To Let property, STDL will not be that different in my case. The property I am intending to buy will be the first one in UK.
Interestingly someone told me that there are very minor benefits of being a First Time Buyer – these are typically just slightly lower fees . In fact there are more benefits not being a FTB than being one. Not Sure why though! |
Re: Buy to Let or Residential Mortgage Route
Originally Posted by reading_1979
(Post 12547688)
Thanks for the responses and discussion. I will not be able to avail the benefit of first time buyer because I have a property outside UK. Therefore, whether it is Residential or Buy To Let property, STDL will not be that different in my case. The property I am intending to buy will be the first one in UK.
Interestingly someone told me that there are very minor benefits of being a First Time Buyer – these are typically just slightly lower fees . In fact there are more benefits not being a FTB than being one. Not Sure why though! |
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