New EICR to cover any changes made by outgoing tenant?10:00 AM, 4th May 2021
About A week ago 73
My cousin is 28 and an FTB in a relatively cheap area (2 bed terraces £125-135k). She has a 20k deposit saved up but due to her income of 20k she can only get a maximum of £82k mortgage – too short by about 25-35k.
I therefore thought that I could help. Relatively wealthy, good income. Could I guarantee her a loan for, say, £115k? Its easily affordable even in worst case scenarios. But no. Guarantees from anyone these days are not allowed, unless you’re a parent, and not usually then.
What if I went in as a co-mortgagor? What loan could she get then? (Frankly, I’ve got enough to buy the house in cash). She could get nothing more – of course! – because my property income, healthy though it is, cannot be taken into consideration! Why the hell not, its been going 20 years and is definitely on the north side of average?!?!
Eventually I find a lender who might offer us – combined, you understand – £118k. Whoopee-doo. But guess what? If Im a co-mortgagor, my cousin’s £200 SDLT becomes £4250 just because I’d be added to the loan. That’s REALLY helpful to a struggling FTB!
So some points become apparent:
*FTB’s are unable to get on the ladder because they cannot get mortgages, however well-backed they are.
*Given this is true, exactly which FTB’s are fueling the 100% increase in their numbers these last 6 years? Are they all incredibly well off? And if they are, renting from us clearly hasn’t harmed their prospects.
*Property income is worthless if you’re a lender, but is massively important if you’re a tax man. Funny, that…
*The new SDLT rules stink.
*Talking of SDLT, the government keeps on about making property equal to shares, yet stamp duty on shares of £135k is… £675. Not bloody £4250!
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