Buy to leave?

Buy to leave?

10:21 AM, 30th June 2021, About 3 months ago 11

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I am thinking about a Let to Buy mortgage, but rather than looking for a tenant, I am planning to leave our home unoccupied and largely unfinished, seeing it is a flat and insured by the management company.

I May need the flat in the future and by not renting, it will be kept in good condition and will always be available to my wife and me as we age.

Question please: By not renting, and leaving the flat unoccupied, will we be in breach of Let to Buy mortgage conditions which merely state neither my wife and I nor immediate family must not live in the property.

Any observations would be appreciated.
Kind regards,
James.



Comments

by Neil Patterson

10:34 AM, 30th June 2021, About 3 months ago

Hi James,
The simple standard answer is you have a duty to be upfront with your lender about what your actual intentions are.

If you do take out a Let to Buy mortgage and the lender questions later about the rental status, then they could, dependent on terms and conditions, require you to repay the loan.

by Puzzler

10:49 AM, 30th June 2021, About 3 months ago

You'll need to notify your managing agent/company that it will be unoccupied as that will be a requirement of the insurance

by James

11:41 AM, 30th June 2021, About 3 months ago

Thanks.
Buying a new build bungalow as our immediate main residence and will leave our let to buy flat unoccupied( management company will be told for insurance purposes) in the expectation of property growth over a few years.

by paul kaye

12:03 PM, 30th June 2021, About 3 months ago

The mortgage company solicitors will want a copy of the tenancy agreement and the rent you will be charging etc
The insurance company may need it too.
If you ever have the property empty,you will need to tell the insurance company,if it is empty more than 30 days
or so.

by Judith Wordsworth

12:39 PM, 30th June 2021, About 3 months ago

Of course you are in breach of a Buy to Let mortgage.
Why not buy with a residential mortgage as much cheaper?

by Martin Roberts

12:53 PM, 30th June 2021, About 3 months ago

Don't forget there will be an additional 3% SDLT on the property you buy second, plus full Council Tax to pay.

This may well rise to 200% in some areas.

by Smartermind

12:56 PM, 30th June 2021, About 3 months ago

Reply to the comment left by Judith Wordsworth at 30/06/2021 - 12:39
Probably because as the OP has a bungalow, they may not be eligible for a second residential mortgage as the requirements are much stricter than for a buy to let mortgage and they may already be fully committed financially with the bungalow. The assumption with the buy to let being that the rental income will be used to support the mortgage payments.

Of course the OP could advertise the flat and "not find any tenants" which would provide evidence for why it is not let out.

by robert fisher

13:13 PM, 30th June 2021, About 3 months ago

Also there is the issue of an empty home which after a certain amount of time , i think 2 years , the council can issue and EMDO (Empty Dwelling, Management ,Order) to require the house to be let, monies paid to LL but council allowed to take expenses, add to that the moral argument of leaving a perfectly desirable property un lived in for a long period of time when there is a massive demand for good quality housing. I also think you will run into problems (long term) when insuring

by Simon M

13:32 PM, 30th June 2021, About 3 months ago

James,

To buy with any mortgage you need a solicitor on the lender's panel, and that solicitor has a professional duty to work for the lender - if found out they would be struck off the panel and they could lose their licence to practise. You would breach the lender's terms, so committing fraud. The lender could withdraw the loan with little notice and force a sale at your expense.

As others have suggested, the best way would be a larger mortgage on your main residence and any savings or other money that might be available.

If property price speculation is your main purpose (answer @11:41, 30th June), a financial product might be more suitable than remote ownership of a single unused property with it's associated costs & risks.

by Dylan Morris

15:54 PM, 30th June 2021, About 3 months ago

Why not let the flat out and earn some income. Perhaps use a good letting agent with a fully managed deal to take away the haste of dealing with tenants. Issue a six months AST and let it go periodic, then when you want to move back in simply issue a Section 21 giving two months notice to vacate.
Seems such a waste not to make some rental income as well as capital gain.

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