Emigrating within 12-24 months and buying a house in UK

[mum2bin2021]

Hi all

I'll try to give as much info to prevent dripfeeding, so sorry if this is long. Myself and DH have been in the process of emigrating to Australia since 2018, it's been a long and complicated process and my application for a visa is still outstanding (I've applied for a de-facto visa as DH is an Aus permanent resident).

We have been living in the UK since the start of our relationship (5 years) in rented properties, as we knew we would be emigrating whenever we are given the green light to do so.

We were hoping to be gone already, however Covid has thrown a spanner in the works and the application has taken much longer than we anticipated. I'm also now pregnant with our first, due in March 2021 with six months full pay for maternity leave (unsure if relevant but trying to give as bigger picture as possible).

The rented building we are in is in no way suited for a family/newborn. We are in a two bed flat, with large, steep, communal stairs at the entrance and no lift. Part of the agreement was 'no pets or children' so we are pretty sold on the fact we have to move before baby comes.

We have a fair amount of savings due to saving to emigrate and also because DH has been very fortunate work wise in the past 18 months. As we are going to have the hassle of moving anyway and because rent costs are higher than a mortgage, we have decided to buy a house, with the idea of renting this out when we emigrate. We have found a lovely place and are mid way through the process of buying (lenders survey is tomorrow). We felt that we'd be there for at least a year if not more due to the current climate and how long the visa application is taking.

Australian immigration got in touch yesterday to request an updated police check, which indicates they are currently reviewing our application and therefore a grant could be imminent afterwards. We would be given 12 months at a maximum to enter Australia to validate the visa.

Can anyone please provide a bit of info/guidance on it being possible to rent out a property after only living in it for 12 months? Is getting permission from your mortgage lender to let out your property a huge hurdle? I know there will be costs such as marketing, gas/electric safety checks etc for the property to be let whenever the time comes.

DH has a property he rents out in Australia already, in addition to savings for when we move too, so we would be OK when emigrating but I don't want to be stuck paying a mortgage for a long period of time on an empty property in the UK.

Thank you for staying with me and thanks in advance for any help!

Tbh I wouldn’t go ahead with a house purchase in the UK if you are planning to emigrate.

We returned to England last year after living overseas for 24 years. We didn’t emigrate, my spouse was on expat postings with his employer (although I did end up with a US Passport). We rented out our little house near the M25 for all of that time and we were exceptionally lucky; we did have one nightmare tenant who did a ‘moonflight flit’ owing a few months rent payments.....the estate agency was absolutely useless. Our final tenants before we moved back left the house in a filthy condition.

You will need to keep up to date with all the safety and tax legislation. Many BTL landlords are getting out of the business now as they just can’t make much money out of it. You also have to prepare for void periods when you don’t have tenants. Have you thought about how you are going to maintain the property, to do repairs and decorating in your absence, or to update in the years to come?

How often will you be returning to the UK to visit relatives and check on your house?

It would be better for you to take your money and buy a nice place Down Under; are you buying in the UK in case it doesn’t work out and you have a hunch you may come back?

Do take a look at www.landlordzone.co.uk (especially the ‘Residential Letting Questions’ forum....it’s an eye opener when you see how many landlords have problems with their tenants and trying to do evictions/court cases etc.)

Thanks for the response @Pinotpleasure - we wouldn't be doing it to make a profit, more as a long term investment as it'll be paying for itself (mostly, except maintenance etc) and will mean we always have a base over here.

We have lots of family over here, many in manual jobs (plumbers, engineers etc) and I'm confident they would help out for any maintenance/repairs - we'd obviously be happy to pay them for doing so. We'd also be visiting family every 2 years or so, so could check in ourselves periodically. The thought of nightmare tenants does put the fear into me though.

In our circumstances, would you just rent elsewhere for 12 months? I resent moving again into another rented property (we have moved for work 3 times in 5 years) and thought this way we could look at it as a long term investment but obviously it's a huge commitment and we just want to make sure we're really considering our options.

Thank you for your input - I really value the points you have raised.

Being a Landlord is a massive hassle. Even more if you are overseas. We are currently selling a house we had let out as the hassle, costs, mortgage, tax we're just not worth it. Hardly any gain except property appreciation. However we'd rather invest in other 'liquid' assets than take care of property again. We feel this way despite the fact that the only tenants we had were brilliant and left our house photo worthy for the selling agent. In your position I definitely would not buy. Invest elsewhere and rent.

Our house pays for itself. Appreciation is 3-4% per annum. Stamp duty is an expense. Much more gain to be had investing elsewhere.

If your husband has a rental in Australia, then you are presumably well aware of how much hassle having a rental in another country is.

I would expect the bank might like you to change to a BTL mortgage when you relocate as it won’t just be a temporary posting. You might want to look at loan to value and interest rates on those. And have a look about how you’d secure those if you’re abroad with income there etc.

And finally, I’d think through your contingency plans for unexpected repairs, tenants not paying etc.

Personally, I feel like it would be less hassle to have a btl in Australia if you’re going to be living there unless you feel you’ll want to move back in a few years time and want an easy place to come back to.

Hello again. Here’s a suggestion - I would go to the forums on www.britishexpats.com (I used to post on it when I was an expat).

There are four sections on the Australia board: the main one for
Australia in general, a board for visas/citizenship, ‘The Barbie’ day-to-day comments from mainly expats residing in Oz and a newer ‘Update’ board for people who’ve moved (or chose not to in the end) and how they are faring. It’s a wealth of interesting information (eg. As you know it’s so difficult for Australians to even return there from overseas right now....the advice being given is for people to upgrade their economy class air tickets to business class to greatly increase the chance of getting on the flights).

I would post your question on the boards there whether or not it’s feasible to try and rent out a property from another continent. Almost certainly some expats have ‘been there and done that’ and you may get a list of the pros and cons.

Personally given your short time line of when your visas may actually be issued, I would absolutely not be buying a UK property at this time. What if you bought a property and the lender will not let you change your mortgage to a BLT?

Also it’s a big ask to expect relatives to do the property maintenance (eg. Emergency call outs for the boiler/plumbing) in your absence for say, the next 20-30 years or more - especially if the tenants trash the place or stop paying rent and then you have to bother with court orders, bailiffs etc. We always had an agency to collect our rent but we always knew we would return permanently to the UK. You will almost certainly need an agency tbh to check that the tenants are legally in the country and take copies of their passports, issue keys etc as it’s a big responsibility to pass on to family members. However, if you do go ahead, join the NRLA (National Residential Landlords Association) as it has online courses so you will learn what your responsibilities are - tenants have more rights than you are probably are aware of.

www.nrla.org.uk

It may be worth seeing if you can stay on a bit longer in your current place? If you have a car you could keep your stroller/buggy in the boot and use a baby sling (or car seat) when your baby is tiny. You can get bulky items like packs of nappies delivered to your door. You won’t want to acccumulate too much stuff in any case as you will be emigrating. Your LL can’t kick you out and you can just continue on a month-to-month basis until your visa comes through. It will be ‘Sod’s Law’ that you move into a new rental place and then your visa arrives lol!

Btw; my Aussie expat mates have always seemed to do very well renting out their properties Down Under. They also had the advantage of ‘negative gearing’ (look it up!) which UK landlords don’t have.

Good luck whatever you decide?

Talk to a broker about the mortgage. You can be totally honest with a broker so set out exactly what you are thinking and they will let you know what's possible. The LTV requirements are often different between BTL and owner occupied. You can't live in a house you have a BTL mortgage on though, so you would be looking at switching after a short time.

Personally, having rented out a house in the UK whilst living in Australia, I would not buy a house if I was in your position. I already owned my place but I should have sold it before I left. The returns are crap these days, there are much better investments that don't require the maintenance and stress related to renting a place out.

Alternatively if you are only going to Australia for a year or two then it makes more sense. Or if you delay travel indefinitely then buying makes sense. Are you really going to emigrate with a new born? It's possible but not easy.

I would not advise being a landlord overseas. We did that when we moved back from Florida. It was a lovely beach house and we thought we might like to live there again in retirement. We rented it out and it was nothing but a nightmare. Not worth the small income we received. We sold it three years after we moved. It was also a pain when doing our taxes every year.

Just wanted to say thank you to everyone - it's looking like we'll be backing out of the sale and renting somewhere local to our families for 12 months. We've talked through the pros and cons and I think emigrating with a baby will be tricky enough and the less ties we have to sort in the UK the better. It's been really helpful to see some outside perspectives, I feel bloody awful about backing out of the house sale though

That's a really good decision. Good luck with everything!