The 'Accidental Landlord'
For those who haven't come across this term before, it sounds bizarre. More often than you think people are having to let their properties without in being their initial intention, in this post I explain more about the nickname given to this group of people, the 'Accidental Landlords...'
What is an accidental landlord?
The term accidental landlord is given to those who have decided to let their property through circumstance, rather than it being their initial intention for the property. This could occur for a number of reasons including death, divorce, having to relocate with work, or not being able to sell the property prior to a new property purchase.
What mortgage options are available if I am an accidental landlord?
If no further borrowing is required, then most lenders will consider giving you ‘consent to let’ your property, this would be subject to certain criteria for example, the market rental value for your property, rental demand in the area and how long you have owned the property for. Some lenders increase the rate of interest on your mortgage as a result of giving consent to let.
If you require changes to the mortgage, such as further borrowing, then buy to let mortgages are available for first time landlords, again these are all subject to certain criteria so speak to Hope Mortgage Solutions for a free initial consultation to discuss your options.
Can I release funds from my current property to provide a deposit for my new home?
Yes, if you are going to keep the existing property and run this as a rental property you can release funds and the market rental income will be used to establish the maximum loan available – the funds raised can then be used as the deposit for your new residential property purchase. This type of transaction is known as a ‘let to buy’ not all lenders can accommodate this type of transaction, so it is vital you speak to your mortgage advisor before making an offer on a property.
Please note, by owning more than one property in the UK you will be subject to the additional stamp duty land tax rates (https://www.gov.uk/stamp-duty-land-tax) and you will need to speak to your accountant for advice regarding your tax position by keeping your existing property as let.
For more information regarding your position with mortgages as an accidental landlord, speak to Hope Mortgage Solutions on 0117 914 7471.