Buy to let in Cambridge?

[Egghead68]

I am thinking about buying a buy-to-let for about £300 near Addenbrooke's Hospital in Cambridge. My elderly parents live in Cambridge and the idea would be that I move there when the time comes that they need someone close by. In the meantime I will have got on the property ladder there before prices skyrocket further.

I have around 5-6 years mortgage left on my own £240K property, an income of around £60K pa and no savings.

My questions are (a) do you think I have any chance of getting a buy-to-let mortgage and (b) does this sound like a sensible plan?

I'd be grateful for any advice.

assuming you mean £300k....

find out what it would rent for. Work out your mortgage repayments, agents fees, tenancy fees, insurances (you need lots of these). Include cover for boiler and other emergencies on the assumption that you are not able to sort problems yourself. Think about what happens if the place is empty.

then see if the sums stack up.

Sorry yes 300K. Thanks Specialsubject. I will get my calculator out and maybe contact some agents.

Well I think I would need at least 20% deposit so 60K plus solicitor's fees, mortgage arrangement fees etc. so probably 70K up front. I have about 3K so I think it's out of the question for now!

A lot of BTL mortgages are only available through mortgage brokers and there is a confusing array of products, all with different conditons.

It is worth contacting one of the big, fee free brokers who will offer a no obligation consultation. In particular some lenders are mainly looking for experienced landlords whilst others want 40%+ deposits. Some BTL mortgages come with big up front fees (there is some debate about whether these are tax deductible though the Inland Revenue seem to be allowing them for now) but as a first timer you are probvably better off looking for a mortgage with a low up front fee. I have had good experiences with London and Country but there will be others.

If you have enough income, the way round the deposit issue is to increase the borrowing on your own house. You can use that as a deposit on a BTL. Taxwise you might have an arguement that if the proceeds of the remortgage clearly went directly towards paying for the BTL property, perhaps if paid straight to your solicitor, you should be able to offset the interest cost against tax. However the truth is that you are unlikely to be making a profit for about 5 years. Good potential pension though, and as you suggest, useful to have somewhere near your mother.

Thank you Needmoresleep. I will do some research.