New Zealand - Buy to let mortgages in the UK

rowells

16th July 2008, 02:14 AM

Hi,
We seem to be in a similar position to alot of you guys out there, cant sell the house and getting FRUSTRATED!!!
Anyway, we are thinking of the renting out route until the market picks up so we can get going.
My question is... does anyone know about buy to let mortgages, do you have to have one? If so does anyone know any good ones?
Also, if you leave the UK and then sell your house here later on does it then become an investment and theefore you have to pay capital gains tax on it when you sell it?
All very confusing!!!
Thanks in advance for any replies.
Rache

victoria24

16th July 2008, 02:37 AM

regarding the buy to let scenario.. if you're with a high street lender they should grant consent for now but will review you onto a buy to let product when your tie in ends.
feel free to pm me if you need any off the record advise ( i own a mortgage company)
cheers
neil

Marsh

16th July 2008, 03:02 AM

If it is your only property investment (i.e. your main residence) then you do not pay CGT as noone pays this on their main residence when they sell. As for lenders you can approach your exisitng lender and ask for a consent to let form. This varies between lenders and some may not even allow you to do this and could insist you have a buy to let mortgage. The other issue you will have is that you will have to change your home insurance to a buy to let type as you can't have standard home insurance when you are letting your home out.

Before i go on try here - http://www.lcplc.co.uk/
They are brokers on residential as well as Buy to Let and charge no fee.

If you want to see an example of rates around this can be a place to look -
http://www.themoneycentre.co.uk/SearchProduct.asp?type=1&email=&link=
They charge a fee though if you want them to do all the leg work so you may be best seeing the examples and mentioning them to the fee free broker above and making sure they compare with what else is on the market.

This is all if your current lender won't agree to your letting your home though.

Another thing to note is that most lenders will insist on an AST (assured shorthold tenancy) being in place when you let your home out. This allows them......should it come to it be able to evict tenant after the satutory period has passed...whereas a long term AST means they have to wait ages to get their money back. An AST is also in your interests as it also helps with regard to the law etc.....

Make sure if you are going to let your home out you do it before October as you will require and EPC (Energy Performance Certificate) from this date when you advertise your home for rent......and you pay for it by the way. The tennants deposit will have to be held with the governments deposits scheme in case there are any disputes between you and them...

The list goes on...i may have got some things wrong but i think the majority are correct...as we tend to have our agents deal with it all.

You will also have to do yearly Gas checks and you might as well have an electrical check done as well (this is not done yearly can't remember how often) as at some point this is most likely going to be introduced as law.......we find it easier to let our agents deal with it all.....

Check your agents are registered http://www.arla.co.uk/ if they are not...if things go pear shaped good luck complaining or even getting your money back. So far anyone can set themselves up as a letting agent so you need to be careful...if it is too good to be true and all that...think you get the message.

You will most likely need an accountant to sort out your tax returns if you are the type not to do it yourself (like us) so make sure you cover all your basis....

Bottom line do your homework, double check and triple check all your information (including what i have told you). Good luck........Landlord

Joolzr

16th July 2008, 02:35 PM

We got permission to let our home but this was on the basis that we are going back to the UK. Also our mortgage company charged us £100 for the admin but then gave us 30 days to get a lease in place and tennants in. Which makes life difficult. If they turn you down, you need a couple of months to arrange a new mortgage and so you need to get permission further ahead than this. They did extend it without charge when I pointed this out...

I got my insurance through the landlords association. You have to join but it was half the cost of the other deal I had found.

Good luck!

Julie

K&J

16th July 2008, 03:00 PM

My understanding of Capital Gains Tax is that you only pay the tax on any increase in value that property has gained from the date that it was no longer your primary residence. Therefore if you rent it for two years and the property value stays the same during this period you don't have to pay any tax. If it goes up 10k in that period then you pay CGT on the 10k but not on any value that the property accumulated whilst you were living in it.

Can anyone tell me if this understanding is correct?

Jo Jo

16th July 2008, 04:14 PM

Paul

17th July 2008, 11:36 PM

Hi K&J, your understanding is partly correct, but if the house you are selling was your primary residence, then you can sell it up to 3 years after moving out of it and still not have to pay Capital Gains Tax - see my previous post (http://www.emigratenz.org/forum/showpost.php?p=200463&postcount=6) for details.

Also, if you are living in NZ and don't return to the UK for 5 years after selling the property (apart from holidays, you're not liable for CGT, either.

AFAIK, this information is still valid.

It is still correct plus the capital gain would be time apportioned in that so many years would be subject to the PPR exemption and so many subject to CGT. It would not be taxed only on the gain since it stopped being your main residence as someone above mentioned

If in doubt as always seek advice :cheers