Non Standard Mortgages - Let To Buy
Why Let To Buy?
The most reason that is cited for the popularity of let
to buy is that homeowners wish, or are forced to move house,
but do not want to lose ownership of the property. It is
fairly natural that in booming property market homeowners
are reluctant to give up an increasing asset for fear of
loosing out on greater gains.
The most likely reason for a move is a long-term job relocation
or temporary spell in another part of the country, but there
are other reasons why you may wish to move out of your house
but retain ownership of the property.
If your circumstances have changed, for instance your kids
have moved away leaving you in need of a smaller more manageable
property for yourself, then it can be a good idea to move
into a new property yourself and let your existing one out.
This can even act like a form of long term pension provision
- once the mortgage on the property is paid off, it will
go on providing an income, with the added advantage that
you also retain the underlying asset.
In some areas of the country, it may be extremely difficult
for some budding landlords to get a foothold in the property
market, due to the size of the deposit required for a buy
to let property, or the erosion of rental yields by high
property prices. But if the property you own has been yours
for some time, the mortgage repayments may be significantly
lower than they would be on a similar property bought now.
This may mean that your existing home offers the potential
for a much better rental yield than a newly bought property
would do.
Another reason that you may wish to retain ownership of
a property is a little more practical - you may wish to
move back into it at some point in the future! It may be
a home that has been in the family for a long time, or you
may have a particular affinity for an area. You no longer
want to live in the property, but nor do you want to lose
it for good. If you are selling in the south and moving
to the north or from one area with rapidly rising prices
to another with more steady growth you may be right to fear
losing out financially if you ever need to return.
If you were to sell your home and buy another in the area
you are moving to, you may enjoy slow growth in the value
of the new property but find that prices had spiralled when
you returned.
