Normal mortgage or buy to let?

[NotABeliever]

Hi, I would be grateful for some advice.

We're considering buying a flat in London for our two children who are at uni. We will need a mortgage. Would this be a buy to let? Or a normal mortgage? We're not planning to charge them rent. We might sell it or rent it out after they finish uni if they don't end up living in London.

Also, as they're both students and not working yet, am I correct in thinking that the deeds can't be in their names because they need to match the borrower's? It would be handy to put the flat in their names so as to avoid the higher rate of stamp duty as we already have a property.

Thanks in advance

BTL or standard mortgage

BTL will be interest only and standard will most likely require a repayment.

With BTL- Deposit will be minimum 20% and may be much higher -The amount that you can borrow depends on your tax rate and the amount that it lets at. This can be an issue as affordability isnt based on your income. Check they let a relative live in a BTL

Our bank suggested remortgaging our own home and buying in cash was worth looking at.

CGT when you sell as well as it is a second home.

Need deep pockets

You cant put a mortgage property in their names but also bad for them as they will lose their 1st time buyer stamp duty discount. This will impact on the 1st property that they buy.

Oh and if you intend to casual let in the future then check the borough regulations for air b n b etc as it is very limited in some such as Westminster and Southwark. This limits the market as many BTL buyers want to air bnb.

Has to be BTL

You'd need a 'family buy to let' mortgage

No it doesnt. You can have 2 residential mortgages in your own name.

Most BTL mortgages won’t let you let to family. You should speak to a mortgage broker.