Go Back  British Expats > Living & Moving Abroad > Middle East
Reload this Page >

Buy to Let or Residential Mortgage Route

Buy to Let or Residential Mortgage Route

Old Aug 10th 2018, 2:38 pm
  #1  
Just Joined
Thread Starter
 
Joined: Apr 2014
Posts: 14
reading_1979 is an unknown quantity at this point
Default 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.
reading_1979 is offline  
Old Aug 11th 2018, 4:54 pm
  #2  
Forum Regular
 
Joined: Jan 2017
Location: Dubai
Posts: 98
UKMS is a glorious beacon of lightUKMS is a glorious beacon of lightUKMS is a glorious beacon of lightUKMS is a glorious beacon of lightUKMS is a glorious beacon of lightUKMS is a glorious beacon of lightUKMS is a glorious beacon of lightUKMS is a glorious beacon of lightUKMS is a glorious beacon of lightUKMS is a glorious beacon of lightUKMS is a glorious beacon of light
Default 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.
UKMS is offline  
Old Aug 12th 2018, 1:30 pm
  #3  
Forum Regular
 
Joined: Feb 2017
Posts: 45
kostik3000 is an unknown quantity at this point
Default 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.
kostik3000 is offline  
Old Aug 12th 2018, 1:57 pm
  #4  
Forum Regular
 
Joined: Jan 2017
Location: Dubai
Posts: 98
UKMS is a glorious beacon of lightUKMS is a glorious beacon of lightUKMS is a glorious beacon of lightUKMS is a glorious beacon of lightUKMS is a glorious beacon of lightUKMS is a glorious beacon of lightUKMS is a glorious beacon of lightUKMS is a glorious beacon of lightUKMS is a glorious beacon of lightUKMS is a glorious beacon of lightUKMS is a glorious beacon of light
Default Re: Buy to Let or Residential Mortgage Route

Originally Posted by kostik3000 View Post
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.
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.
UKMS is offline  
Old Aug 12th 2018, 2:14 pm
  #5  
Forum Regular
 
Joined: Feb 2017
Posts: 45
kostik3000 is an unknown quantity at this point
Default Re: Buy to Let or Residential Mortgage Route

Originally Posted by UKMS View Post
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.
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.

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.

Last edited by kostik3000; Aug 12th 2018 at 2:16 pm.
kostik3000 is offline  
Old Aug 12th 2018, 5:41 pm
  #6  
Forum Regular
 
Joined: Jan 2017
Location: Dubai
Posts: 98
UKMS is a glorious beacon of lightUKMS is a glorious beacon of lightUKMS is a glorious beacon of lightUKMS is a glorious beacon of lightUKMS is a glorious beacon of lightUKMS is a glorious beacon of lightUKMS is a glorious beacon of lightUKMS is a glorious beacon of lightUKMS is a glorious beacon of lightUKMS is a glorious beacon of lightUKMS is a glorious beacon of light
Default Re: Buy to Let or Residential Mortgage Route

Originally Posted by kostik3000 View Post
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 .
I assume you mean BTL property not mortgages ? ... SDLT is calculated on the price of the property ..... If it’s your only property (worldwide) you pay standard rate not the higher rate but you don’t get the first time buyer benefit for BTL .... I certainly wouldn’t be letting HMRC ‘assume’ anything.

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.
UKMS is offline  
Old Aug 13th 2018, 2:28 pm
  #7  
Just Joined
Thread Starter
 
Joined: Apr 2014
Posts: 14
reading_1979 is an unknown quantity at this point
Default 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!
reading_1979 is offline  
Old Aug 13th 2018, 2:49 pm
  #8  
Forum Regular
 
Joined: Jan 2017
Location: Dubai
Posts: 98
UKMS is a glorious beacon of lightUKMS is a glorious beacon of lightUKMS is a glorious beacon of lightUKMS is a glorious beacon of lightUKMS is a glorious beacon of lightUKMS is a glorious beacon of lightUKMS is a glorious beacon of lightUKMS is a glorious beacon of lightUKMS is a glorious beacon of lightUKMS is a glorious beacon of lightUKMS is a glorious beacon of light
Default Re: Buy to Let or Residential Mortgage Route

Originally Posted by reading_1979 View Post
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!
There are so many considerations in swaying one way or the other. I’m probably biased because BTL is serving me very well both as an income and a bricks and mortar long term investment. Problem is what you might choose as your main/future residence might not be the best option for BTL. Good Luck !
UKMS is offline  

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Contact Us Archive Advertising Cookie Policy Privacy Statement Terms of Service

Copyright © 2018 MH Sub I, LLC dba Internet Brands. All rights reserved. Use of this site indicates your consent to the Terms of Use.