Let To Buy online mortgage broker and advice
Let to buy mortgages
In the current market, many householders do not consider a sale as a sensible option. Even so, they still need to upscale as their families grow , or downscale as their need for space reduces.
With the additional factor of strong rental market, holding on to an existing property seems prudent. As a result, the let to buy option, or letting your current home with a view to purchasing another is now becoming commonplace.
By using the let to buy route for your purchase you eliminate a number of key frustrations.
- No need to sell current property
- No need to accept a low offer
- No agents fees to be paid
- No time wasted with potential purchasers
- No purchase chain to manage
Let to Buy – the complications
Letting out your current property before buying a new one does add complications to the mortgage process.
Lenders have vastly differing attitudes to let to buy.
In fact, some some providers will not advance a mortgage for your new purchase at all until you have been renting out your current property for at least six months.
For this reason, it is always better to work with an independent mortgage broker to arrange mortgages when you are considering a let to buy situation.
Your mortgage broker will be able to assist you in raising capital on your current property if required and then advise you on suitable Lenders and products for your new property.
Let to buy and taxation
During the autumn statement in 2015 the Chancellor announced an increase in stamp duty for purchases on a second property from 1st April 2016.
This directly affects those looking to let to buy. By definition, letting your current property in buying a new home means you are buying a second property. As a result, under the new rules your stamp duty bill on the purchase will increase by 3% of your purchase price.
If you buy a new home whilst at the same time selling your current home you are not liable to this additional stamp duty (assuming you own the other property).
If you do not sell your current home when buying a new home, you will pay the extra stamp duty but this can be reclaimed if you then sell your current home within six months.
In some parts of the country, property is so sought after and valuable, that even this hike in stamp duty land tax may not be a sufficient deterrent to second home ownership. If, as in London, the value of your property can rise by 5% or more within a year, paying 3% extra stamp duty does not seem a bad idea.
If you are considering let to buy or buying a second property and are worried about the stamp duty implications call us now on 020 8979 9684