Combining student lettings, holiday lets and HMO

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    Combining student lettings, holiday lets and HMO

    Is there any lender that will allow this? I would like to be able to let a property to students for most of the year, but advertise it for holiday lets on a site such as Airbnb during the summer. In addition, I would like to be able to let out the property to two separate parties (since it has 2 kitchens and whilst it is officially one house, the layout allows it to be treated as 2 residences).

    In addition, I am ideally looking for a lender that will allow this for first-time buyers. If it helps, I could purchase the property with a residential mortgage and then re-mortgage to such a product if it exists, so that I would not be a first-time buyer at the point of purchase, even though it would be my only property. In addition, I do have the funds to purchase a small flat before re-mortgaging if this would solve this problem.

    #2
    Also what would I do about council tax, insurance, income tax etc. if I combine these? Would I need to keep updating everything?

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      #3
      What if I bought the property using a residential mortgage, then took out a secured loan and used this to pay off the mortgage? Is this allowed? And do secured loans have conditions on what you can do with the property?

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        #4
        Suggest you need the advice of a qualified Tax Accountant.
        You cannot buy Property with a residential mortgage if it is for a B2L (the key is in the name).
        Some Councils won't accept Air BnB..
        Your paperwork could be horrendous.

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          #5
          Speak to a broker. You may find it difficult to get any mortgage with 2 kitchens as it would probably be classed as 2 properties by the Council Tax office. Likewise insurance.

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            #6
            Originally posted by mariner View Post
            Suggest you need the advice of a qualified Tax Accountant.
            You cannot buy Property with a residential mortgage if it is for a B2L (the key is in the name).
            Some Councils won't accept Air BnB..
            Your paperwork could be horrendous.
            Thanks, I wouldn't let it with a residential mortgage which is why I am asking the question. I would assume that the council allows Airbnb as there are a lot of other properties on it in the area.

            Originally posted by DPT57 View Post
            Speak to a broker. You may find it difficult to get any mortgage with 2 kitchens as it would probably be classed as 2 properties by the Council Tax office. Likewise insurance.
            I do already have a residential mortgage lined up, however I appreciate that there is no guarantee that I will get another one. For this reason and since the mortgage that I would like may not exist, I was wondering about taking out a secured loan (as mentioned before) after buying the property with a residential mortgage, and then using the loan to pay off the mortgage. Is this allowed and do secured loans have any conditions on what you can do with the property?

            I do find it very frustrating that mortgages are so inflexible. I want to have the option of living in my house if I want but also of letting it out, and want to be allowed to do all types of letting including HMO, student lettings and Airbnb. My income is much higher than the mortgage repayments would be so I find it very frustrating. Also I could afford to pay for around 70% of the property with my own savings and it is frustrating that one is bound by the same mortgage conditions whatever the LTV is - surely if I have paid for the vast majority of the property then the conditions should be more relaxed than for someone who made a very small deposit?

            I thought that maybe a few personal loans would be a solution as there are some advertised at around 3% APR. I just applied for one but it was offered to me at 12.9% APR. This seems crazy and it is a shame that I have had to affect my credit score to find this out.

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              #7
              Has no one ever done this before?

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                #8
                Given that you are likely to have to pay several thousands of pounds in initial fees and early repayment charges with that idea I doubt that many on here have done it, no.

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                  #9
                  Yes it is frustrating. Does anyone know if you are allowed to pay off your mortgage and keep a secured loan though? I appreciate that it would not be a normal thing to do, but if it means that I am not bound by conditions on what I can and can't do with my house, it could be worth it.

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                    #10
                    You can usually pay off a mortgage early, although there may be penalties associated with that.

                    I don't think you would be able to get a secured loan on a mortgaged property, though.

                    The terms of a secured loan are likely to be significantly more restrictive than a mortgage.

                    The legal and mortgage term rules about AirBnB are far from clear.
                    Well, they seem pretty clear, but there are so many people running AirBnB lettings that enforcement seems to be pretty non-existent.
                    Please don't read into that any suggestion that you go ahead.
                    When I post, I am expressing an opinion - feel free to disagree, I have been wrong before.
                    Please don't act on my suggestions without checking with a grown-up (ideally some kind of expert).

                    Comment


                      #11
                      Thanks, from what I have seen a lot of secured loans seem to require a property to be mortgaged though. This is why I am wondering whether or not it is ok to pay off the mortgage after taking out the loan. I feel that the internet is lacking in information on secured loans.

                      Also what is the legal position on letting out a house as if it were 2 properties, when it is officially only one?

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                        #12
                        Originally posted by mlod42 View Post
                        I feel that the internet is lacking in information on secured loans.

                        Also what is the legal position on letting out a house as if it were 2 properties, when it is officially only one?
                        The internet is not a good place to find information on a lot of things.
                        I'd talk to people who sell the products you're considering.

                        You can let parts of properties to different people.
                        What matters is how what is rented is described, how one part is differentiated from another and whether a property comprises a dwelling house or not.

                        You're talking about a fairly complex business venture and you need to do some serious research and take proper legal and financial advice.
                        You're trying something very ambitious on a budget.
                        When I post, I am expressing an opinion - feel free to disagree, I have been wrong before.
                        Please don't act on my suggestions without checking with a grown-up (ideally some kind of expert).

                        Comment

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