Buying a house before you will actually live in it

Original post by Minniemousexx

I'm 19, me and my boyfriend have been together for a good few years and are starting to look at buying a house together. We are hoping to move out around spring/summer 2016.
We have just found some perfect new builds near us, which are eligible for the help to buy scheme so very affordable for us too. We have contacted the building firm who have said the houses will be ready around August/September 2015, so a bit early for us - we could afford to buy the house at this point but just want to wait until we have both finished studying first.
Does it seem idiotic to buy the house, then wait nearly a year to actually move into it?

Thanks for any advice :smile:

No - the earlier you buy it, the less it's likely to cost (depending on which part of the country you're in). Plus if you're not living in it for a year, provided that the mortgage provider consents, you can rent it to a tenant who will cover the first year's mortgage for you.

Reply 2

balotelli12

9

The mortgage provider WILL NOT let you do that.

Reply 3

Original post by balotelli12

The mortgage provider WILL NOT let you do that.

They did for me :smile:

Just needed to fill out a "consent to let" form, agree to pay a higher interest rate for the temporary rental period, and that was it.

(edited 10 years ago)

Reply 4

455409

17

Original post by balotelli12

The mortgage provider WILL NOT let you do that.

You would think, wouldn't you.

Reply 5

balotelli12

9

Original post by tazarooni89

They did for me :smile:

Just needed to fill out a "consent to let" form, agree to pay a higher interest rate for the temporary rental period, and that was it.

Don't believe you.
Which mortgage provider?

Reply 6

Original post by balotelli12

Don't believe you.
Which mortgage provider?

Nationwide
http://www.nationwide.co.uk/NR/rdonlyres/C8EB3FA4-5ACB-4F54-AD6A-72340D0788C5/0/M642_ExtendingLettingAgreement.pdf

Why would I lie about it? :s-smilie:

(edited 10 years ago)

Reply 7

OP

Original post by tazarooni89

No - the earlier you buy it, the less it's likely to cost (depending on which part of the country you're in). Plus if you're not living in it for a year, provided that the mortgage provider consents, you can rent it to a tenant who will cover the first year's mortgage for you.

Thank you for your help :smile:

What kind of costs would be involved in having the house, without actually living there? e.g. I know we would still have to pay council tax.

Reply 8

S1an

Original post by Minniemousexx

I'm 19, me and my boyfriend have been together for a good few years and are starting to look at buying a house together. We are hoping to move out around spring/summer 2016.
We have just found some perfect new builds near us, which are eligible for the help to buy scheme so very affordable for us too. We have contacted the building firm who have said the houses will be ready around August/September 2015, so a bit early for us - we could afford to buy the house at this point but just want to wait until we have both finished studying first.
Does it seem idiotic to buy the house, then wait nearly a year to actually move into it?

Thanks for any advice :smile:

You probably wouldn't actually buy it until its been finished. Although i have no experience with new builds, so i don't actually know. Don't you pay a deposit to the building firm & then closer to the time you actually proceed with contracts and conveyacing, etc? The reason i am thinking this is because what would your mortgage provider actually secure the lending on, if there are no bricks and mortar yet?

Reply 9

OP

Original post by S1an

You probably wouldn't actually buy it until its been finished. Although i have no experience with new builds, so i don't actually know. Don't you pay a deposit to the building firm & then closer to the time you actually proceed with contracts and conveyacing, etc? The reason i am thinking this is because what would your mortgage provider actually secure the lending on, if there are no bricks and mortar yet?

Yes I think you're right, you put down an amount to reserve the property with the building company, then sort out the contracts a couple of months before the property is ready to move in.
However even with that, the property will be ready about 9/10 months before we were looking at moving out :smile:

Reply 10

DiddyDec01

3

Original post by S1an

You probably wouldn't actually buy it until its been finished. Although i have no experience with new builds, so i don't actually know. Don't you pay a deposit to the building firm & then closer to the time you actually proceed with contracts and conveyacing, etc? The reason i am thinking this is because what would your mortgage provider actually secure the lending on, if there are no bricks and mortar yet?

It will really depend on the House builder and whether or not they are trusted by the lending company. Also whether or not the build will have NHBC certificates when complete.

Reply 11

Original post by Minniemousexx

Thank you for your help :smile:

What kind of costs would be involved in having the house, without actually living there? e.g. I know we would still have to pay council tax.

If nobody is living there, then you'll have to pay council tax (unless you manage to rent it, in which case your tenants pay it). You'll need to have insurance on the building as well. In some cases, if it's a leasehold property (usually the case with flats rather than houses, not sure about new builds) you'll also have to pay ground rent and a service charge to the freeholder. And of course you'll have monthly mortgage payments to make. That's about all I can think of at the moment.

Reply 12

jelly1000

21

Original post by Minniemousexx

I'm 19, me and my boyfriend have been together for a good few years and are starting to look at buying a house together. We are hoping to move out around spring/summer 2016.
We have just found some perfect new builds near us, which are eligible for the help to buy scheme so very affordable for us too. We have contacted the building firm who have said the houses will be ready around August/September 2015, so a bit early for us - we could afford to buy the house at this point but just want to wait until we have both finished studying first.
Does it seem idiotic to buy the house, then wait nearly a year to actually move into it?

Thanks for any advice :smile:

My main thought is that if you are both studying full time will you be able to get a mortgage? Normally mortgage providers want to see a healthy salary before they will lend.

Reply 13

alibee

2

You could end up in major hot water buying a property off plan. Basically at the start you're promising to buy the property when it's complete, you normally put down a deposit at this stage. You will also have to show a mortgage offer for the rest. However, it's far too long between this and the actual completion date for this mortgage offer to still be valid, so you need to get a new one at that point. If at that point, you can't get a mortgage, you're royally screwed as you're bound in a contract to pay £X on X date and if you can't pay, you will definitely lose at least your deposit. In addition, when the developer puts the property back on the market, if they can't get the same money from someone else, they can sue you for the difference.

This is a particularly big risk if you'll both be studying at completion date as I don't understand where you'd get a mortgage from at that time?

So in short, yes it would be idiotic to buy this house in your situation, especially if you don't even want to move into it then. You pay extra for a brand new house and, if you then rent it out to someone, it's not even going to be brand new when you move in. People never take as much care with rentals as with their own home. Why not just look for a house nearer the time you actually want it and save all the risk?

Reply 14

Hedgeman49

17

I don't know why everybody has overlooked the fact that a 19 year old is is planning on buying a house with a boyfriend and moving in 1-2 years' time? This is madness, you'll grow up a lot between now and then and you may realise that you don't even like the guy by then. I know you'll say it's true wuv etc but let's be realistic

Reply 15

OP

Original post by jelly1000

My main thought is that if you are both studying full time will you be able to get a mortgage? Normally mortgage providers want to see a healthy salary before they will lend.

My boyfriend is on an apprenticeship scheme and I study part time and work 30 hours a week. Our joint income is around £30,000 before tax :smile:

Reply 16

OP

Original post by Hedgeman49

I don't know why everybody has overlooked the fact that a 19 year old is is planning on buying a house with a boyfriend and moving in 1-2 years' time? This is madness, you'll grow up a lot between now and then and you may realise that you don't even like the guy by then. I know you'll say it's true wuv etc but let's be realistic

Thanks for your comment , I do understand your point but we have been together for 4 years and during that time both have changed a lot but the relationship is still going strong. We are both mature for our age and are in a strong position financially . If we had been together for the same length of time but were a bit older, I don't think anyone would have any reservations :smile:

Reply 17

jelly1000

21

Original post by Minniemousexx

My boyfriend is on an apprenticeship scheme and I study part time and work 30 hours a week. Our joint income is around £30,000 before tax :smile:

Ah I see

Reply 18

theateam121

6

I was in a similar situation to you. Unless you think these new builds are you dream property then I'd wait a little longer and see what you can find when you're closer to getting ready. Build up your deposit a bit more.

Me and my partner put a deposit down on a house and started paying our mortgage before we planned to move in and then had to rent it out due to the costs (we also have a pretty healthy joint wage, there's just a lot of running costs that come about!) After renting it out it wasn't our first new house together because we'd been paying it for 11 months but someone else had been living there! Now we wish we'd waited and got a house that we could have moved straight into when we were ready!

Reply 19

Reue