Can anyone advise on Let to Buy?

[Nugg]

Despite my house getting lots of interest online, nobody has viewed and I have found somewhere that I would like to go.
This is a viable option for me when I've looked online but a mortgage advisor has either got the wrong end of the stick or I have !

Does anybody know enough about this to give me any advice because I don't know where to start?

No viewings means overpriced. By a lot.

Don't you mean buy to let?!
Seriously though, why don't you just price your house at a realistic price that your local market can actually pay and then make an offer on the house that you like? As @DrySherry, if you haven't had a single viewings, it's likely to be v over priced. Being a landlord is potentially risky and stressful. Why would you want to take on this risk and a mortgage for a new house unnecessarily?

I think you mean Buy to Let?

I agree with the others that if you aren’t getting any viewings, it is very likely that the EA has valued it too high & you will need to adjust the price to get viewers through the door.

Surely that is the logical first step.

You might need to find a broker or Talk to a bank to investigate further. I've looked at the concept of Let to Buy and its not as easy to find information about it. Everyone (including Google) defaults into assuming you mean Buy to Let.
You might have to look at breaking down into a remortgage on current property+ additional borrowing on new.

But, if you are not getting viewings, it's definitely the price

When google is being crap I use DuckDuckGo which often gives the results I actually want.

No, Let to buy is different. BTL is buying a house to let it out. LTB is renting out your current home and using finance against it to enable you to buy another home. Often used if someone is relocating for work for example but doesn't want to/ cant sell their current house.

A good broker will help you OP, not only see if it is possible, but help you decide whether its the right thing for you

It’s not going to be quick or easy, and if you haven’t had any interest in selling your house, are you confident you’ll rent it out successfully with no voids?

We considered this, and a) we couldn’t find a residential mortgage provider who were happy with the deposit for our next house coming from a BTL mortgage, b) we couldn’t find a BTL mortgage provider who was happy to give us a BTL mortgage on a house we were currently living in.

We ended up managing to buy without needing to remortgage our flat (managed to find somewhere happy to lend 5x my salary). Honestly that feels safer to me anyway, just having one mortgage.

I agree with other posters that you’d be better dropping your price and selling. You don’t make much money via BTL these days.

I see thanks. I understood what the OP meant but didn't realise that there was a special term for this.
I think it's a bad idea in the circumstances she describes. It might have worked 30 years ago but probably expensive and risky now rather than profitable.

Let to buy - you rent your home rather than selling in order to buy another one. It's an option if you have your heart set on another place and don't want to lose it waiting for a sale. I personally wouldn't want the responsibility of two homes but I would consider it for my dream house I guess.

I was tempted to do this but CGT put me off. I wouldn't get anything out of it.

And yes yes, my property was wildly overpriced by the EA.

I wouldn't OP. Get your place revalued by at least two other EAs and re-list. Hopefully you'll get more interest.

I did let to buy about 6 years ago

about to go into meeting - will check back later, but fundamentally…

property 1. - remortgaged onto a BTL mortgage, leaving 25% equity , and taking the rest of the equity out as £

put that equity into property 2 (residential mortgage) which we then moved to

that bit was pretty straightforward - but lots to consider when doing this, mainly on the letting out the property bit. There’s a lot to being a landlord and successive governments are putting in place measures that make it less and less attractive for ‘amateur’ landlords

we’re glad we did it as enabled us to move to dream home, but sold the BTL last year (after almost 5 years) and am relieved we have for a number of reasons

let me know any specific questions you have.

Tax is going to be an issue with this. You’ll pay income tax on the letting income, and if you’re a 40% taxpayer you can only offset half of the interest on your BtL mortgage against that income. BtL mortgage rates are about 5% afaik. Rental yields before tax and costs are probably about 4%. So maybe 3% after tax and costs. That means your BtL interest-only mortgage could end up costing you more than you’re making in rent - in other words you could be making a cash loss every month on the old house, let alone it contributing anything towards the mortgage on the new house.

As mentioned you’ll also end up paying capital gains tax on any increase in value of the house being rented out - and there’s a lot of speculation that CGT is just about to be put up in the next Budget. You’ll also pay an extra 3% stamp duty surcharge on whatever home you’re buying.

For me, those three unfavourable tax implications would put me off.

It’s also going to be much harder to sell your house with a tenant in situ. Which means that if you find you are losing money, you’ll have probably 6-12 months with the house empty while you sell it, during which time you are paying two mortgages.

I think you’d be a fool to start being a LL in the current climate

We had lots of people offer on our house on this basis, only to withdraw when they really started looking at the figures. I now wouldn’t accept an offer from someone looking to let to buy.

'We had lots of people offer on our house on this basis, only to withdraw when they really started looking at the figures.'

Exactly.

Thanks everyone apologies for late response.

Yes I mean LTB not BTL.

Honestly, my house is priced to sell, I am not naive, its in a strange no mans land price range of possibly FTB or possibly those moving up from terraced to semi properties BUT those are not selling due to the LLs all pulling out of the letting market. My only concern is the agent, who was recommended and I have since heard not so good things about.

I understand the risks of being a LL atm.

I have taken advise yesterday from mortgage advisors - two - who both agree its a viable option, the figures for the LTB are healthy eg rental £1000pcm, mortgage £350-450pcm. I potentially have access to a steady stream of tenants through work.

I have good equity and my LTV on the new place would be less than 50% with the cash I intend to put in as well.

I am not a 40% tax payer yet, and understand re CTG and 3% stamp duty.

I am happy to rent out until I retire and work PT in 5 years, I also think this is a more favourable option than a bridging loan which is riskier and more expensive.

My work circumstances have changed and I really need to relocate closer asap hence the haste to do so.

With respect, if your house isn't even getting a single viewing, it's over priced for the current market, rather than priced to sell. If that was so, you would have had offers.
This aside, if you have gone through the figures with advisors, only have a small mortgage on the property, have thought through the potential pitfalls and taxes, plus the risks that the price may decline rather than rise, and still think it works best for then give it a try.

Sounds like you might be one of the few people it might work for then. If you can get a mortgage approved on both new and old places then give it a go!