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  • Buy-to-Let

    First Time Buyer and BTL

    Hi All,

    I'm keen to start my buy to let portfolio, However, I am yet to purchase my first property/home for me to live in personally. I plan to hold my buy to let portfolio in a limited company and I am thinking about starting with ground rents.

    If I purchase a property in my company first, would this mean that I am no longer a first-time buyer? I don't want to jeopardise my chances of getting a 5% mortgage especially as I'm a Londoner!

    Your thoughts are welcome!

    Lou

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    Ground rents are very specialized and there is great demand for these pp in London. You will be up against the experienced professionals and individuals who regularly attend auctions to buy ground rents. As a first time buyer learn to walk become you run.

    In connection with owning property in a company others here are better informed than I am - sorry on this part.

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    Many thanks Douglas, I'm a surveyor specialsing in asset management so not too phased by the management of Ground rents. More just to get my foot in the door and would be a cash buy.

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    You have no chance of getting a conventional BTL mortgage for ground rents. Ground rents are a fantastic low risk investment in property but there is legislation all over it so people (ie tenants) do not lose their homes. You will see individual ground rents on the market (usually auctions) but these are usually reversionary plays for developers who can afford to wait. The big players have 100,000's of ground rents and have a machine to send out notices, etc. Are you sure this is for you? You will need to invest and wait a long time for your upside.

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    Chartered Accountant, Tax Advisor and Mortgage broker

    (and BTL portfolio owner)

    stuart@johnsonsca.com

    02039077022


    Many thanks Stuart, this would be a cash buy if ground rent. I'm a surveyor so am aware of the issues. But I agree the pending legislation is a bit off putting.

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    Louise, if you purchase a property through a Ltd then the company would be the property owner NOT you personally, so would not affect your FTB status.

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    You would have to directly own an a major interest in a dwelling to lose the FTB status. Whether or not ground rents are a major interest in this context I'll leave to the tax experts. The Ltd company would avoid direct ownership but it may not be necessary.

    https://assets.publishing.service.gov.uk....pdf 

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    A good teacher must know the rules; a good pupil, the exceptions.

    Martin H. Fischer