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  • Buy-to-Let

    Changing from resi > BTL with low equity?

    Hi all,

    I want to BTL my residential property in Medway, Kent which i purchased in 2017. Currently, i don't have much equity in the house (Around £8,000 currently). Is it worth waiting another 2/3 years to gain that equity and then to move on as i'm in no rush to move.

    Advice is appreciated

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    I am not sure anyone can make that decision for you.

    I can answer the question if you "can" get a BTL Mortgage, based on the equity you have but only if we know the property value.

    Though you can also put spare savings in when you remortgage to increase that equity.

    If you should wait also depends on what savings you have for your next residential property. As the £8k equity will (presumably) stay where it is, you will need some savings to use as a deposit to buy your next residence.

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    _________________________________________________________________________


    The above post is not financial advice, its often me rambling - passing time on a coffee break.
    If you are looking for the Best BTL Mortgage? Call the Specialist Team at Bespoke Finance.


    _________________________________________________________________________


    Hi Adam,

    Thanks for your response.

    The property value is around £230,000. (based off other properties similar to mine in my location)

    I already have the savings for my next residential property, but the issue is not having the equity/enough funds to have 25% equity in my current residential property.

    I think it would be best for me to wait a few more years to see if house prices go up therefore gain more equity? Your thoughts are appreciated as i'm new to this!!

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    Some lenders may give you consent to let - basically convert the current resi mortgage to a BTL.

    Entirely dependant on the lender if they do it - and what fees / additional rate they might charge you for doing it.

    ... have you budgeted for the extra 3% stamp duty on the next property ?

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    DISCLAIMER just my personal opinion - for legal advice consult a qualified professional grown-up.


    Hi Owen,

    Thanks for your advice- will look into it.

    Unfortunately yes i have, although someone mentioned that if i take my name off my current mortgage and leave my partners there- and then purchase my new residential property in my name its a way around it, as technically that would be my first property?

    Any suggestions.. sounds to good to be true to me?

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    I think you will need more equity to do a BTL.  Regarding the Stamp Duty and first time buyers have seen on other forums that once you buy a house as a first time buyer then if you take your name of the mortgage and purchase another it will be treated as a second home.  (3% extra charge) 

    The same applies (apparently) if you leave the country for example for a couple of years and come back and buy a house (though how they find out about this I have no idea). Good luck.

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    Hi Mia,

    It sounds like you might struggle to release that equity and it is more likely that your lender would agree to "consent to let" but that does not really help you if you don't have the 10% deposit and 3% stamp duty to move on with.

    Have you thought about taking a lodger to "sweat the asset" a bit more?  If you rented out a couple of rooms, you could use the income to build up your savings pot or pay down your resi mortgage to create a lower LTV which would then enable you to re-mortgage to a BTL mortgage and, on redemption of the resi loan, keep any funds as a deposit on your new home.

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