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  • Buy-to-Let

    Using residence as stepping stone to BTL

    Sorry self employed (sub contractor) 15 year only had one week without work in all that time been very lucky. I have my own cover liability cover, serious injury and life insurance. What you have explain. my partner has said the same as you let's pay the mortgage of then start. But my argument is our currant home the mortage is only £185 a month so it as good as mortgage free with the payment been so small.


    OK so being Self Emp gives a far clearer picture.

    As far as personal mortgage goes - you should be aware that SMI (basically Housing Ben for mortgage borrowers) no longer pays a no strings benefit for loan interest - but has been changed to an interest bearing loan - which then progressively leeches equity from main home.

    To be eligible for SMI - both you and partner would need to jobless and have no savings/investments over £16000

    How much of the £20000 savings have you set aside for the 31 Jan Tax payment???

    Looks like you net around £24000 pa after Tax/NI - so gross figure will be around £30k - suggesting Tax/NI due is around £6800


    These need looking at carefully - if say you have an Annual Sickness/Accident policy that is fine for a short lived issue eg  a fracture where you are back at work after a few weeks - but such covers are little use for any chronic condition which may prevent you working long term.

    Term Life cover - very cheap at yr age and you need maybe £200kplus of cover of say next 20 yrs so family is OK.

    CRITICAL ILLNESS - this pays a lump sum in case of specified illnesses/PTD (Permanent Total Disability) - again fairly cheap at yr age assuming you are fit and have no existing conditions/risk factors - obesity/high blood pressure/high cholesterol/diabetes and reasonably OK family history eg no parental/sibling early deaths. If you take no prescription drugs and are a non smoker and have a BMI below 30 (25 being bang on normal) you should be OK for CI at standard rates for yr age. You can get free quotes online.

    To put Ins costs in to perspective - check out online what State Bens would pay out if you were disabled - you will be shocked at how little the disabled are expected to live on.

    You should also consider CI for your partner - as without her child minding you would not be able to work full time - so it is an issue for the household.


    How long would it take you to save up the next 20 grand?

    I think the answer to that question will ultimately determine how heavily mortgaged you will need to be .


    Your route is a one a number of landlords have taken

    but you should heed the issues landlords now face

    you may fine within a few deals you come under s24 ect

    you may find your bussinss is derailed by future changes

    in short the government dosent want you to invest in residential property

    and I feel yours and my service are not required


    Learn Change and Adapt ?????

    All comments are for casual information purposes only. If you wish to rely on any advice I have given please ensure you obtain independent specialist advice from a third party. No liability is accepted for comments made.

    Yes is a great idea

    One I encourage my tradesmen to follow .

    Some do, many don`t as they focus too much on the day to day and have no vision

    I tell them crawling around in tiny dust filled loft spaces is fine when you are 35

    But at 55 though you will get weary and want to get another 35 year old to do that for you

    They mutter and nod to appease me and say yeah Jon I will look at it tomorrow perhaps but Im busy now  

    but rarely do they look at it  as they start their drills up again and put their headphones back on

    So yes good on you  build an asset base for yourself and keep it all in house

    Do it while you can and while you have the energy

    I havent got the trade skills but I`ve use tenants who have the skills to get bigger and better

    So they rent a dive of a studio from me and do it up then move to a dive of a 1 bed with girlfriend

    Have 1 kid so they get a dive of a 2 bed and another kid they upgrade to 3 bed and stay put

    We work out the financials splitting labour / materials etc

    I add value so can release more equity to buy more

    And hopefully as a reward one day they will buy the 3 bed off me

    It works in fits and starts but i see it as a practical `help to buy` alternative

    I wish the government would facilitate a business plan to incorporate and help those with practical skills

    I do it on an ad hoc basis but it needs streamlining and then all parties can gain  which didnt before


    Jonathan Clarke. http://www.buytoletmk.com

    What you have said is just what the plan was I'm am 34 work with lots of fella ranging from 20-60 don't have no plan in life but the pub and all the older fellas have bad backs every other week.

    I'm doing this not to be the next Allan sugar just for a bit of an extra income and when Im in my 50-60 can just get a little part-time job and keep me on my feet don't want to be climbing roof 1st. And 2nd fixing house


    For what it is worth, this is exactly how Nick and I got started in BTL.

    We released £100K equity from my flat in London by changing it to a BTL mortgage and Nick sold his house in Fareham (we wish we hadn't done that now!!) to add to our pot.

    We then purchased a new residence in Guildford and bought a pied a terre one bed flat in London in need of refurbishment.  We refurbished that flat and used it as our London pad for around a year.  We then got "consent to let" from the lender.  We purchased another pied a terre residence in London (new build 2 bed flat in Walthamstow with one bedroom rented out to a lodger) and used that for around 18 months, before we decided to live permanently in Guildford.  This was because we were cutting down our broadcast TV activities and did not need a bolt hole in London.  We then got "consent to let" on that flat.

    Both those flats were later changed to BTL mortgages and were able to release equity during that process.

    All our other BTL purchases have been using standard BTL mortgages but my flat in North London that I had owned for 14 years was the equity kick-starter and stepping stone as it had a huge amount of equity and worked very well as a BTL, being walking distance to Finsbury Park tube station.

    Just make sure you use the correct financing - as others have stated - and work with a mortgage broker like the PT Brokers Team at John Charcol on 0333 363 6507 who are both BTL and residential.  You will need to co-ordinate the financing, as the BTL lender will want to see that you have a residential address to move to.

    ​Good luck and do keep PT up-dated on how you get on!

    Useful resource - Growing a property portfolio - resources


    Just one other thing to raise after the excellent advice of others here is schools. You mention you have a family - there will be key points for school applications (unless you are paying for private) where it makes it difficult for you to be in certain properties as you are either in wrong catchment or flitting between properties may be seen as a fraudulent school application. Just adding to the mix of one other thing to take consideration of. Good luck.


    Sounds sensible. My only concern comes when you said move on to the next. So long as you do rent it is straight forward but if you sell it I think you are establishing a trade so the profits subject to income tax not CGT (so no PPR relief).


    Chartered Accountant, Tax Advisor and Mortgage broker

    (and BTL portfolio owner)



    Hi Hullycity82,

    I’d say that it sounds like a very good, practical idea.

    It sounds like you know exactly what you want to do and have thought of all the different scenarios.

    If this is what you want to do, then go for it! You know what you need to do to achieve what you want and seem confident that you are able to do it.


    Transparency notice: OneandOnlyPro is a commercial partner of Property Tribes.