Kevin Mc

Anyone know of any decent lenders for Buy To Let?

Has anyone any general advice regarding buying to let / costs / tax etc?

We're thinking of buying a 2 bed apartment to rent out. Thinking of doing this primarily as an alternative to a pension.

Badger Stuffer

I know the halifax do a buy to let mortgage. I've seen posters in my branch advertising it.

Look on their site.

GTI

If u do this becareful as this market has apparently had its day. (flooded market)

GTI

Tiggs

"Thinking of doing this primarily as an alternative to a pension. "

as an addition to pension is cool....but using a single asset subject to income and CGT to provide an income in retirement is not exactly a diverse portfolio though.

T

fast bloke

Tiggs - What about 30 of them? - And you only pay CGT if you sell them. I could manage in my old age on 20k a month - You can do my IHT plan

Kev - You will be looking for 15-20% deposit and a rental income of approx £65.00 per month per 10k of mortgage you need.

Bank of Ireland have a couple of good deals on for 85% LTV and Woolwich BTL if you can manage 25% deposit.

Tiggs

fast bloke, im no expert (well i am!) but isnt 30 different to 1?

RON

You only pay CGT if it's not your main residence, so, when the time comes to sell it, move in for six months before you do, that way, no cgt, at least I think it's 6 months!!

Kevin Mc

It would be on top of my pension (poo though it is, no point dropping out of company scheme as they are contributing a decent wedge!)

Cheers for the info - I'll check out the rates at the Woolwich / Bank of Ireland.

fast bloke

Woolwich BTL - 4.45 lifetime tracker 75% LTV

BOI - 4.49 3 yr tracker 85% LTV.

Both operate mortgage * 6.5% * 125% /12 for min rental income



Tiggs - 30 BTL's still not a diverse portfolio ...... I know you are no expert

Am I sick or just mad!

Can you do BTL and live in rented yourself?

NACRO

quote: "but using a single asset subject to income and CGT "

Of course you could get your wife/girlfriend to own this one. Thus avoiding any CGT. As for moving in yourself, I reckon that would (does) work but do it to many times and I'm sure they would hammer you. If anyone knows different let me know as I want to sell an property in TW and don't want to pay any tax. Perhaps we'll "move" back in there for a while before flogging it.

fast bloke

Nacro - I have a friend who builds houses. He builds a house, moves in for 6 months while he builds the next one, sells it and moves to the new one for 6 months while he builds the next one. He has moved 17 times in 13 years. He lives in an 8000 sq ft mansion with no mortgage, and he lives off the money he makes doing it. So far he has not paid CGT although the revenue are aware of what he does, so it seems to be legal. AFAIK you only need to be able to prove that the house has been your main residence at some point within the past 3 years.

Steve Howat

I believe it goes that you only pay CGT on any profit made on the property value from the 5th year onwards i.e. if you sell the house or move back in within a 4 year window the government don't get anything (except income tax on the rent payed less the mortgage repayment).

unclebuck

fast bloke - that is a good plan and one that I looked into as a business model. The building plot bubble has burst now though.

AS I understand it there is no minimum time for occupancy, as long as the property is your main place of residence at the time of the sale, you should be fine.

UB

Tiggs

lol- you boys need to see someone go through an IR investigation.

T

NACRO

Once you've got the cash, how can they get it back off you (ie the IR). Especially if you don't live in the UK?

Obviously I'm not going to do that- just wondered?

chinnybloke

When we looked at BTL mortgages most wanted 25% deposit and rental income to be 125% of the mortgage costs.

The rental market has picked up again due to people being worried about jumping on to the property ladder (first time buyers) and people cashing in on their equitity to go into rented accomodation whilst they hope the market collapses so they can then buy much more for their money in a couple of years.

I am 100% behind property as a pension. If you own your own business look at starting a self administered pension and buy commercial property. The contributions come off profit so you pay less corporation tax and then if you also occupy the building you pay rent to your pension fund.

I believe the tax situation is you only pay CGT on the difference between purchase and sale price when you sell and if it is run as a business you can get taper relief which in effect means you pay 10% after owning the asset for just 2 years (it used to be 4).



[Edited by chinnybloke - 8/29/2003 1:57:55 PM]

Tiggs

"I am 100% behind property as a pension. If you own your own business look at starting a self administered pension and buy commercial property. The contributions come off profit so you pay less corporation tax and then if you also occupy the building you pay rent to your pension fund. "

this is what we do. good idea.

get cash, run away from IR before they spot you....bad idea!