When the time comes to sell, there is usually a need for speed. Isn’t it always the case that the minute you start to think about selling, you see the ideal property you want to buy? The problem is that the chances of getting a chain-free sale on your own property to coincide with your dream purchase can sometimes be slim.
We always try to approach our clients’ needs from a solutions-driven perspective, and have recently helped a number of sellers move house quickly and profitably by encouraging them not to sell, but to rent out their existing property using a “let-to-buy” mortgage.
Let-to-buy allows you to borrow money for your new home in the usual way, whilst your existing property is rented to tenants, with the rental income being used to cover your existing mortgage repayments. You can sometimes even raise further funds on your existing property to assist in the purchase of your new one.
Most lenders will want independent verification that the achievable rental income is at least 30% more than your current mortgage repayment, although lending parameters are changing constantly.
Things to consider before embarking on a let-to-buy venture include tenant management and ongoing maintenance costs as well as certain tax and insurance implications, so it’s not for everyone. But let-to-buy is an excellent “chain-breaker” and can be an entry route to building a profitable portfolio of investment properties, which many people are currently incorporating into their pension planning.
If you would like to discuss this innovative approach to getting you moving faster and whether your property could be suitable, please fee free to contact your local branch. We’re here to help and our straight-talking advice is free.
Neil Newstead, FARLA MNAEA
Chief Executive Officer