Any help with this mortgage/property query greatly appreciated

[present12345]

Sorry in advance if any of what I write sounds ignorant, but am looking for advice.

In 2015 I brought a one bedroom flat in London for £325k with a large deposit. The property has gone up in value to approx £375k. I had a baby last year and moved into rented accommodation, so the mortgage is now on a buy to let mortgage. I did try and sell it this year, but had little interest and have since got new tenants in, who's tenancy is up in August. I get really good rent as it's in a good spot in London.

I am desperate to move into my own home, but obviously can't sell at the moment as I have tenants and also worried if I do put it on the market it won't sell. Properties where I live (not in London) are around £330k for a small terrace house, which would suit me and my daughter fine. My question is do I have any options? I earn £40k a year (not loads) but pay £1200 in rent each month and support myself with bills etc. I have no savings as this was all put towards deposit.

1. Could I release some equity from my property to put a deposit on a property? Would this mean I'd need to reapply for another buy to let? I only just changed it over recently.
2. Could I have a buy to let property and my own mortgage at the same time?
3. 40k isn't a huge salary in the grand scheme of things! How much of a mortgage do you think I would be able to get.
4. I was able to put down £150k deposit on the flat originally thanks to savings and a extremely lucky inheritance. How much equity could I release?

Any insight would be greatly appreciated.

I believe you can only release up to 75% equity, so you'd need 25% still in there. So you'd need approx 92k equity in the property. So in theory you could release approx 50k.

Yes, you would need to find a new btl mortgage, for 282k. You would need the rent to cover at least 150% of the mortgage payments. Your income will most likely be enough to support a new btl mortgage for this amount, it's mostly worked out on rental yield.

For your new mortgage you'd probably be able to borrow between 120k to 180k, and you'd have a deposit of 50k released from your btl. So a total of max 230k property value.

You'd also need to pay stamp duty as you're not a 1st time buyer, and any early repayment fees on current btl mortgage.

So I'd say no, sorry, you can't buy a new home in your current area.

Speak to a broker to get more exact figures.

Best of luck.

@Ihavekids I thought this would be the case. Thank you so much for taking the time to reply though. I guess I'm going to have to hope I can sell it in the spring, but with tenants it's a whole different ball game xxx

You maybe able to sell with tenants in situ , speak to an agent.