Renting out a property until we are ready to move in.

[amanda.1982]

Hi,
Me and my partner are living in Australia at the moment but are planning on moving back to London in feburary. We have saved enough money to buy a property when we get back.

When we return to London my partners parents have said we can stay with them for only a couple of weeks unitl I get a job ( my partner has one to come back too) as we will be sleeping on the coach. I am happy for us to go rent a flat but also want to buy a flat as soon as possible as well as I feel property can go up rapidly in value in as little as 6 months.

What I would like to know is if we take a 6 month lease on a flat and then one month later find our dream property to buy, can we buy it and rent it out until our rental contract is up and we are ready to move in without having to get "a buy to let mortgage" .

Is there much difference between a buy to let and a normal mortgage and also if we have to get a buy to let mortgage are you then allowed to move into it a few months later yourself?. Sorry to ask so many questions but can you get mortgages pre approved in england and if so and we apply while living at his parents for "a buy to let mortgage" are they going to be likely to lend a higher amount as we be paying virtually only 50 pounds a week rent?
Many Thanks

[Twenty20]

Firstly, I'm not sure property prices are going to rise much in the UK in the next 6 months, in fact, in most areas they're likely to be stagnant or slip back.

Renting a property whilst looking round for a place to buy is a reasonable idea. It might be worth telling the prospective landlord or agent your situation and only signing up for an initial 3 month contract if you can (there's no reason for a tenancy agreement to be 6 months though most landlords prefer this) after which you'd switch to a periodic tenancy and only have to give one month's notice.

A buy to let mortgage is usually around 85% of value but the lender would look at what the rental on the property would be. There's a few people on here who have taken out buy to lets more recently than me and would have more recent experience of this.

[redcrx]

Im taking out a BTL mortgage at the moment on a property ive been trying so sell.

A BTL with lend up to 85% approx but it will actually go by the rental valuation of a property rather than its true valuation.

The BTL mortgages are usually a higher interest rate than standard mortgages as they will not prevent you from borrowing for another property.

The BTL mortgage does not even specify that the property has to be rented out, but of course you have to keep up payments regardless or risk losing the property.

As twenty says, i cant see prices increasing in the next 6 months, in fact here in suffolk preices have remianed constant and some properties are now dropping in price too.

[amanda.1982]

Thanks for your advice. I am only worried about the prices going up because its london and my friend wanted to buy a studio in a huge residential block she was living in chelsea and they where around 120,000 for a small studio with loads of apartments for sale about 9 months ago she went back to brazil and returned 2 months ago to find that the same sized studios are now selling between 150 -160 and she cant afford one now!

So just to confirm there is now law stopping you from moving into a property you have bought with a buy to let mortgage.

[redcrx]

theres no law to stop you but as i said the repayments are likely to be higher than a standard mortgage.

[dolly pond]

when u come to buy, make a really low offer and see what happens, at least then u still could move into your new home asap if its a bargain

good luck