We can't sell our current home for 3 years. Can we rent this one out & get a second mortgage?

Posted on 27 January 2015 by Steve

Hi I have a 3 bed house my wife and I brought from the council just coming up to 2 years ago, we have a £120,000 mortgage and the house is valued at £350,000 , it is right on the cross link railway and prices are expected to rise by around 50% in the area in 2 years (I can't see it going that high myself, but who knows). We would like to move from the area and the house we have found is £550,000, I can't sell my house for 3 years as there's a clause in the contract from the council, but went that's up its the same sort of time as the cross rail will be completed, do you think I can get a second mortgage for the new house and keep my existing one and rent that out as we are allowd to rent the property, I can get around £1,800 a month renting it out, thanks. A 36 years of age couple from West drayton London.


Without knowing your exact financial circumstances, I can't say whether what you are looking to do is feasible or not. Certainly in principle, what you are looking to do, which is a Let To Buy is perfectly doable, however, as with many things the devil is in the detail.

Typically most lenders use a combination of overall indebtedness, rental income calculation and loan to value (LTV) to assess how much you could raise on the current property if you should need to. Most lenders cap the the LTV at 75% (£262,500) and this means that the estimated rental income of £1,800 per month, should meet most lenders rental calculations (normally 125% of the monthly payment at a notional rate of 5%). The lender would also need to know how much you would need to know how much you are looking to borrow for the new property, to ensure that you met their criteria for affordability.

If you'd like to talk about your enquiry in more detail, then you can contact one of our consultants on 0344 346 3672 and they'll be able to give you a clearer idea of how we can help you make the move you're looking for.



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