Do HMO and Buy-To-Let properties require different Mortgages? | Q&A Series

Reading Time: 2 mins

Yes. 

Whether you go directly to a Bank or use a Mortgage Brokers, something many Buy-to-Let property owners will find challenging is having a HMO.

What is a HMO?

A Household in multiple occupation. 

This means that a property rented out by at least 3 people who are not from 1 ‘household’ (for example a family) but share facilities like the bathroom and kitchen. It’s sometimes called a ‘house share’. … You must have a licence if you’re renting out a large HMO in England or Wales.

REMORTGAGE

Before your Mortgage Broker approaches or advises that you submit an application with a particular lender, it is important that you understand that lenders policy. This is because you could go through the credit search, application process and find out that your application is rejected once the valuation is carried out. This would be down to the fact that the surveyor has observed that your property isn’t a conventional BTL property, but a HMO.

PURCHASE

Ideally you would of applied to your local council for a HMO licence during the negotiation/Purchase Offer stage as the licence can take a while to come through. 

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The 2018 Budget – Things you need to know

Stamp Duty – Travel – Income Taxes – Brexit

Reading Time: 4 mins

What does this mean for First-Time Buyers?

Nothing much has changed here.

However, for First-time buyers purchasing a property using the Help to Buy Shared Ownership scheme, an anomaly was fixed. Previously, buyers of a shared-ownership property would be taxed on the full market value of the home (up to £500,000) rather than only the share they were buying. If the full market value of the shared-ownership property was more than £500,000 the buyer would not have been eligible for any stamp duty reduction at all.

So, a buyer paying £125,000 for a 25 per cent share of a new home valued at £500,000 would still have had to pay £10,000 stamp duty – equivalent to five per cent of the sales price above £300,000.

Now, First Time buyers purchasing a property using the Help to Buy Shared Ownership scheme will only be eligible to pay stamp duty, if any at all, for the share they are buying. So, a buyer paying £125,000 for a 25 per cent share of a new home valued at £500,000 will not pay stamp duty.

Other stamp duty rates remain the same.

PURCHASE PRICE

STAMP DUTY RATE ON FIRST PROPERTY (1)

Up to £300,000

0%

£300,000.01 – £500,000

5%

What does this mean for people on £50K per annum salaries?

Previously, if you earned £46,350 per annum and above, you’d fall in to the higher rate tax payer threshold – you’d be taxed 40%

This has now been increased to £50,000 per annum – April 2019

What does this mean for the cost of travel?

No major changes have been made here.

Costs generally remain the same.

However there has been an introduction of a new rail card for 26-30 year olds providing 1/3 off most rail travel. This will be made available nationally by the end of the year.

Brexit? What happens now?

This is something that I will not dabble too deep in. After all, our Schools, Higher Education facilities and Government have barely wrapped their heads around this.

However, from the budget, it is clear that a lot of money is being pumped in to various regions to help supplement the immediate defects of suggesting and eventually leaving the European Union, however this is a grey area as we haven’t even established 1. Whether we’ll have a no deal Brexit 2. Whether we’ll have a Brexit deal 3. Whether there’ll be another referendum resulting in no Brexit at all.

The point I want to make here is the importance of understanding the political process and what your vote means. Keep your eyes peeled, ears open and remain attentive along the Brexit journey so that you know how the progress or lack of it, will affect you.

Read Newspapers, watch/listen to the news, question time and have a little fun with the internet -Ultimately, stay informed.