Hi All,

Please bear with me. I was made redundant over a year ago, and as a single Mum, I've just started my own business, but am still relying heavily on benefits while I find my feet - financially.

Our landlady's told us she's selling the house in June and as we've been here for 5 years and are so happy and settled, I'd love to somehow be able to buy it.

The house is expected to go on the market for 220K.

My mum recently sold her house and has a 30K deposit she can give us and I'm now considering the following options:

1. My ex, who earns a good wage (100K) can 'Buy to let' for us? This sounds too good to be true - what are the issues surrounding this?

2. Would my 71 year old Mum be able to re-mortgage her house that she owns outright? It's value is 200K. Is she able to do this at her age - how much could she raise - again - what are the issues surrounding this?

I'm pretty convinced that our dream's not achievable, but I thought I'd ask here first - I've heard great things about this forum.

Here's hoping,

Many thanks in advance.

Hello and Welcome vegetablelasagne,

Sorry I can't give you any advice but hopefully people more knowledgeable in this area will be along shortly to give you some help.

Good luck with what your trying to achieve.

Regards,

Scott.

1. My ex, who earns a good wage (100K) can 'Buy to let' for us? This sounds too good to be true - what are the issues surrounding this?

2. Would my 71 year old Mum be able to re-mortgage her house that she owns outright? It's value is 200K. Is she able to do this at her age - how much could she raise - again - what are the issues surrounding this?

 

I'm pretty convinced that our dream's not achievable

Option 1. Should you need to claim Housing Benefit either now, or in the future, the rental arrangement with your ex could be seen as "contrived". It is unlikely that HB would be paid should the Local Authority come to this conclusion (and it is quite likely they would).

Option 2. To be honest, I don't see any mortgage provider would be willing to lend to a pensioner unless she has a substantial pension income. Equity release may be possible, but this is rarely a good idea and should never be considered without some proper legal advice (and certainly not off the internet).

To be brutally honest, in your current situation, I don't think home ownership is a realistic goal, but I suspect you have already reached that conclusion.

option 2 will also look like deliberate loss of assets unless she can show large income and that will cause you both untold problems should she ever need means tested care.

Ex would need to own his own house (mortgaged)

He would need a deposit of around 55,000

Rental would need to be in excess of 851 per month

which you would need to pay ( no hb)

Mother would only raise around £70,000 on equity release

Urgh - thanks so much for your help everyone - looks like we'll have to find somewhere else as suspected.

Maybe your LL will sell to another LL?

Thank you Sparks - that had crossed my mind - but this area doesn't tend to have many rental properties - so I'm already looking to uproot and move to another town.

Hi theoldrouge!

I just wanted to clarify on a few points you made if that's OK? - please excuse my ignorance.

1. Why does my ex already need to own a property? Is that one of the criteria for buying to let - can you not buy your first property as a Buy to Let?

2. If I found work (within the next 3 months) - I would be able to pay the rent you quoted.

I'm thinking that with my Mother's possible equity (to be seriously considered first) of 70K, plus her deposit of 30K, my ex would only need to raise a mortgage for 120K as a Buy to Let....is this feasible?

Thanks again in advance.

Regardless of any other issue, buy to let mortgages specifically prohibit letting to family members.

Oh blimey!!!

OK - thanks reallymadwoman!

...and I suppose it's not possible for him to buy a property and not live there?!!

 

I'm thinking that with my Mother's possible equity (to be seriously considered first) of 70K, plus her deposit of 30K

How is she raising 70k equity without:

a) selling up and then moving in with you?, or

b) selling up (again) and downsizing / moving to a cheaper area?, or

c) getting a new mortgage (unlikely to be approved), or

d) using equity release, and all the downsides that come with that that have been pointed out......

Thank you BazzaS - somebody mentioned that she would be able to raise 70K equity.

This thread was intended as a brainstorm really for what appears to be a lost cause.

I've never owned a property - I have absolutely no idea how any of this works - hence me being here seeking advice.

Thank you BazzaS - somebody mentioned that she would be able to raise 70K equity.

This thread was intended as a brainstorm really for what appears to be a lost cause.

I've never owned a property - I have absolutely no idea how any of this works - hence me being here seeking advice.

And I don't want to "just rain on your parade", but you need to have realistic advice, as getting your hopes up unfairly isn't right, either.

It seems to me there are 3 main issues:

A) the deposit, which you have covered.

B) being able to cover the payments of a mortgage ; which your ex MIGHT help with in the short term? but then you are reliant on another, with your new home at risk if their situation changes or you fall out, and

C) Obtaining the mortgage, which may be difficult if on benefits......

If your underlying concern is "I don't want to move if my LL sells", then buying the property is one solution but not the only potential one.

What tenancy do you have / does it give you any security of tenure?.

Hi theoldrouge!

 

I just wanted to clarify on a few points you made if that's OK? - please excuse my ignorance.

 

1. Why does my ex already need to own a property? Is that one of the criteria for buying to let - can you not buy your first property as a Buy to Let?

2. If I found work (within the next 3 months) - I would be able to pay the rent you quoted.

 

I'm thinking that with my Mother's possible equity (to be seriously considered first) of 70K, plus her deposit of 30K, my ex would only need to raise a mortgage for 120K as a Buy to Let....is this feasible?

 

Thanks again in advance.

There are a couple of Building Societies that lend on family buy to lets

Max loan to value 60% ie deposit £88000 on 220000

No disrespect to a lot of what has been posted, but some of it is wrong.

1) Your ex can buy the property whether or not he owns another property, if income allows it. However if it is a second or subsequent property the stamp duty is an extra 3% on all bands. Also he will have to fund the deposit himself (unless of course you still have the same name then maybe you could get away with it as a gift from your mother but then in all probability the mortgage would need to be in joint names. Unless its a BTL you will unlikely get interest only.

2) He can get a BTL without owning another property but there is a very limited choice of lenders. They would also ask a lot more questions. He could not get a BTL and let family live in it unless it was done on full affordability (not rental income based). The minimum deposit for a BTL is 25% (20% in a very few cases) but to get a BTL mortgage the rent would need to be in excess of £1050pm. Unless you are the South East this is probably unlikely.

3) Your mum could get a lifetime mortgage but as already pointed out it would be limited to around £70,000. The implications regarding this and any possible future care costs can be an issue but would really depend on the local authority at the time and how long in the future it would be.

4) The best bit of advice would be find somewhere else and carry on renting.

Thank you all for your detailed responses - I'll bear some of what's been said in mind and investigate a little further, but it really does seem like a bit of a dead duck!

Hi the gov recently changed the buy to let rules in Jan to make it more difficult to do so - they don't like buy to lets.

So its complicated the the way they work it out has to be a certain percent between average monthly payment (in the area) and what the house is worth. I would advise a good mortgage advisor who deals with buy to lets a lot - as its recently all changed. I know somebody if you PM me. I know only one company will do BTL without a wage now.

The interest rates of all BTL are much higher and you have to pay stamp duty of 3% to £125k and £5 % above that - so it's a lot more expensive! as no stamp duty below £125 for conventional mortgage

Also I know that the valuations are a lot more picky, and the house has to be in a lettable condition when you buy it - no buying a doer-upper as for some reason they don't allow for this. The cheaper houses usually need work

Hi the gov recently changed the buy to let rules in Jan to make it more difficult to do so - they don't like buy to lets.

 

So its complicated the the way they work it out has to be a certain percent between average monthly payment (in the area) and what the house is worth. I would advise a good mortgage advisor who deals with buy to lets a lot - as its recently all changed. I know somebody if you PM me. I know only one company will do BTL without a wage now.

Lilipad1, we don't encourage advice by PM. Please keep everything on the open forum. We also don't recommend particular advisers, I'm afraid.

HB

Some of the info supplied re BTL's is basically correct but needs clarifying;

1) There are not any lenders that will do a BTL with no income. There are, however, several that do not have a minimum income and they all look at things differently.

2) There is no extra stamp duty on BTL's per se. The extra stamp duty is on any second or subsequent property. As was pointed out it is an extra 3% on every band. Therefore if the BTL is a first property normal SDLT rates apply.

3) The rental calculation that lenders use to dictate amount of borrowing is generally - amount of loan x 5.5% x 140%.

4) There are also changes happening with regard how landlords are taxed re the rental income. Anyone that pays more than basic rate tax will be worst off.

Thanks again everyone - I've decided not to pursue this dream any further.

Hello,

I'm not sure if this is the right forum?

I'm about to move as the Landlady is selling the house we rent.

She's selling the house because of its ongoing issues with damp.

However, she has often blamed me for not ventilating the property adequately and we have fallen out over this on many occasions as I have been and remain a good tenant - there's only so much you can do in a Victorian house on the edge of a hill.

I've *never* missed a payment, and as far as I'm concerned have lived here with the due respect that I've always shown in other properties that I've lived in.

I'm extremely worried that she will give me a bad reference for our next Landlords/agent.

What I'd like to know - is:

Am I legally entitled to 'view' the reference that she'll send the agent?

Am I legally entitled to be copied in?

Even better:

Am I legally allowed to demand that she sends her reference to me to then forward the the relevant agents?

Many thanks in advance for your time.