Rapitex:
Finally, offer letter from Barclay bank dropped. Thanking everyone who has answered my questions in this group. We were able to get offer even with a fair credit score.

Wristler:
Hello good people,
Any takes on Shared ownership? Is it a yes or no? A relative is considering a 75% shared ownership as FTB.

semmyk:
... ... Unbiased: Shared ownership: ... ...

Wristler:
Hello good people,
Any takes on Shared ownership? Is it a yes or no? A relative is considering a 75% shared ownership as FTB.

Rapitex:
All happened within 10 working days. I used a broker

Goldie10:



Congrats again, please which broker did you use and can you recommend them?

dustydee:
Hello all. Please how can I start a shortlet/airbnb business?
Do I have to own the house or can it be a rented property? Does anyone have a guide on how to do this profitably and pitfalls to avoid?

Ticha:


1. Check the rules in your area. Parts of Wales (Cardiff especially and the Valleys), Scotland (Glasgow, Edinburgh), Cornwall, Devon and London have a ban on short term lets in varying degrees. You will even need planning permission in certain areas which takes months and some serious dosh spent to get. Neighbours will rat you out so ensure you have your Ts crossed!
2. It can be a rented property but make sure you have clearance from the landlord and in writing where possible. A normal BTL mortgage expressly forbids using the property as a short let or as a residential property. Some landlords don’t care and some do – so be upfront with the landlord so they can decide for themselves if they’re happy for you to run a short let
3. It can be your own property but a. if you have bought with a residential mortgage, you will be breaching the terms (na who know go open ya yansh). If you have bought with a specialist short term let mortgage, then you will be breaching the terms by living there as well. Some lenders (Halifax for example) offer a residential mortgage where you can also use the house for short lets for short periods of time thus allowing people to rent out their homes when they go on holiday etc rather than as a proper business.
4. Interest rates for short term let mortgages are way higher than regular BTL or residential interest rates. Deposits are also higher -most lenders want between 35-50% deposit. Most lenders class it as commercial lending so the mortgage term is usually also short (between 10 to 15 years max)
5. To be profitable, you may have to be in locations that may not really be family friendly – city centres, near airports or event centres, touristy areas. These areas will also have competition, so you then have to spend money to up your game. Luxury does not usually equal profit
6. If you live in the house and run STL from it, you will benefit from the government rent a room tax free scheme.
7. People are less likely to misbehave and be shady if you live there and just rent out rooms but then you’re sharing bathrooms, toilets, kitchens and shared spaces with strangers daily – think of family safety.

Pitfalls
1. You need to either have a good cleaning crew or be open to spending a good chunk of your time on cleaning otherwise the reviews will kill your business pretty quickly
2. Location, location, location is key – which again ties into the above
3. Most residential flats expressly prohibit short term lets and where they allow it, other flats will also be STLs so there will be competition.
4. On average, you need to be booked for at least 20 days every month to break even. Expenses to think about off the bat - all the house bills are paid by you, updating furniture and fittings as the wear and tear is a lot higher, higher cleaning expenditure, fees to booking platforms (Airbnb takes an average of 18% of all bookings, booking.com takes 15%, VRBO takes 15%), linen and laundry costs (at every booking), providing and replacing toiletries and tea stuff then rent or mortgage.
5. You are not guaranteed a booking. People will cancel last minute. You will have to reduce prices to keep it competitive. There will be down periods – usually December to March that your expenses will keep running when your bookings are down.
6. The booking portals can shut you down at any time and sometimes for frivolous reasons. Airbnb is very good at this. They can also withhold payments to you and refund customers without your approval and there’ll be nothing you can do about it.
7. Neighbours will intensely dislike you – guests are not usually very considerate. They will park anyhow, party, thrash the property, make noise and you will be called out to break up issues.
8. It can easily become a full time job without the commensurate full time pay unless you outsource it and then that eats into your profits.
9. Reviews even when malicious can make or break you.

We turned our family home into an Airbnb when we first left the UK. We restricted bookings to a minimum of 3 nights. It was a larger home (5 bedroom) and could sleep 12 people, so we got large bookings and were able to charge accordingly (£300 a night and fixed so if it was 1 person or 12 people, you paid the same price. Otherwise, people book for 2/3 and sneak the reast in)

2 bookings was break even for us. So we aimed for a min of 3 bookings a month. Even though we didn’t target tourists (it was near a military base, close to a motorway, a speedway and a nuclear power plant), Nov to March was absolutely brutal! So, we targeted contractors and track racers, those would wake, head off to work, come back, drink, sleep and repeat and they were filthy! OMG! The cleaner always had to take rubbish to the tip -which cost money as well.
Christmas and NY were always booked so we often upped the charge for that time to cover us till March. There is a large number of retirees (67% of the population of the town) so their families would book and stay at ours when they came to see, visit or bury their family member.

There’s was always something to be repaired after every booking. People would put the heating on in the summer and just leave it on all day. Our cleaner lived 2 doors away and would hand over keys so they knew she was nearby, people still tried to have parties, sneak people in, hide broken stuff.

Guests will message at all hours of the day for basic things even when we had a comprehensive house manual detailing every single thing. I can’t find the thermostat for the heating – it’s on the wall by the controls. The lights won’t dim – use the dimmer nau! I’ve forgotten the pin to get in (it’s always the last 4 digits of the booking person’s phone number and they can change the guest one to any 4-digit number), I’ve locked myself out (just use the 4-digit pin that you set! It’s a digital lock o! I can unlock remotely but still!), your spoons are not shiny enough, could you please buy round pasta bowls? Can you get me cots? My baby will only sleep in a cot (we don’t provide cots and it’s detailed in our listing and the booking rules), your bedsheets are not Egyptian cotton, I only sleep on cotton sheets – ogbeni carry your favourite sheets follow body o
You will have your customer service face and voice on 24/7. Knowing what I know now, I’ll take Mon- Fri lodgers over short term let guests if I am not doing it full time.

PS - You can check prices and availability in your given area by checking calendars of hosts on Airbnb or VRBO by month (booked dates will be greyed out), open dates will show prices. Play round with weeks (7 days discounts), months (long term booking discount), check how lax their rules are - strictly no refunds or usually means bookings are generally slow. It is more difficult to do that on booking.com so to check viability for booking.com, use the search function and check which cheap hotel chains are in the area - Travel lodge etc as those will be your direct competition

Rapitex:
Finally, offer letter from Barclay bank dropped. Thanking everyone who has answered my questions in this group. We were able to get offer even with a fair credit score.

Rapitex:
Finally, offer letter from Barclay bank dropped. Thanking everyone who has answered my questions in this group. We were able to get offer even with a fair credit score.

Lexusgs430:



The next thing for you to do now........ Divide your mortgage payment by 4, over pay your mortgage by one week or more if you can afford it..........

This singular move, would shave years off your length of payment......... 🤣😂

Congratulations.........

RENT MONEY IS DEAD MONEY........ 😜🤑

Amazoner01:

Thanks 😂..: I will hold on to this fess. Though I heard that you could be fined for overpaying.. don’t know how true….

costap4u:
New to this post.
Thanks everyone for the wonderful work you are all doing here.
I have a question for those that already have their Mortgage running. Did you all take Critical Illness and Life Insurance for your house? If yes how much is anyone paying ? One Mortagege adviser is quoting £140 per month for Critical Illness and Life Insurance and also said I cant back out once I take it.
Can someone advise please. Thanks.

costap4u:
New to this post.
Thanks everyone for the wonderful work you are all doing here.
I have a question for those that already have their Mortgage running. Did you all take Critical Illness and Life Insurance for your house? If yes how much is anyone paying ? One Mortagege adviser is quoting £140 per month for Critical Illness and Life Insurance and also said I cant back out once I take it.
Can someone advise please. Thanks.

Lexusgs430:



The next thing for you to do now........ Divide your mortgage payment by 4, over pay your mortgage by one week or more if you can afford it..........

This singular move, would shave years off your length of payment......... 🤣😂

Congratulations.........

RENT MONEY IS DEAD MONEY........ 😜🤑

tshoboy:

Oga lexus, can you add some numbers to this so some of us about to start this journey understand and take advantage of this.

Lexusgs430:



The point you engage a conveyancing solicitor, it's all part of the process.......

NB : You have 2 types of survey

- Survey for mortgage (must).....
- Structural survey (optional, more expensive).......

Gazumping might still occur, after all this cost ......

ukay2:


What is Gazumping please?

shaybebaby:

The poster above has detailed one scenario however that is more akin equity release/ additional borrowing.

So let's start from the beginning with this. Foxybingo had a deposit of £100,000 ( saved up because he is a prudent fella) .

Property asking price: £300,000. So foxy speaks to the bank and the bank agrees to lend foxy £200,000. Seller gets his money ( £300k made up 100k from fox's deposit and the bank's 200k). Foxy's Loan to Value of the property (LTV) is 66%( 200k/300k)

Foxy is now liable for £200k which he has agreed to pay back to the bank over, say 25 years.

However foxy does not want to be exposed to interest movements ( like we've been seeing since 2022) so fox's mortgage deal with the bank is at a fixed interest rate of 3% for the first 3 years. After that his interest rate will revert to the banks variable rate for the remaining 22 years. So if interest rates increase, foxy is safe because he has locked in a rate for 3 years. Downside is if they fall, foxy still has to pay that 3% for 3 years. Also he cannot switch lenders during the fixed period without paying hefty charges and blah blah blah.

3 years pass, foxy has been good, and has paid off 30k from the 200k loan. His outstanding loan is now 170k. Property is now valued at £350k. But his fixed interest period is coming to an end. Foxy wants to fix again ( doesn't ever want to pay variable which is usually more expensive).

Fox's loan to value is now 170k/350k ( based on the current market price of the house)=48%.

With a lower LTV, Foxy can get more attractive fixed rates from banks and one has offered him 2.5%. His current lenders variable rate is 4% ( since the fixed rate period is over). So foxy decides to remortgage but with the lender offering the more attractive rate, fixes for another 3 years period. His overall term for the mortgage is now 22 years.

In summary, a remortgage is where you change your existing mortgage agreement to a different one.

Changes can involve term of mortgage, interest rate payable, loan amount and/ or lender but usually in relation to the same property.

deept:


Another point could be interest rates. When we switched mortgages two years ago the best we could get was around 3% so we decided to fix for two years. Interest rates rates that period was quite low with people getting 1.7% etc. We did two years thinkingg before you know it time would be up and we would be able to get lower rates but.....Russia invaded Ukraine, cost of energy went up, cost of living crises, BOE interest rate now 4.25% might go up this month again. Fixed term Is over I'm in sifia pains paying double the interest this month compared to last month on my mortgage.

Get all the education you can, get all the information you can. Lime they say best ttime to plant a tree was yesterday, next best time is today.if an opportunity come take it. The person with 5% deposit could potentially be paying less interest if he had taken is mortgage 2 years ago compared to someone with 30% equity with today's rate.

reavealhidden:
Barclays would lend to someone on any kind of visa, even a Tier 4 student visa @ 90% LTV i.e. you only need a 10% deposit. You must have lived in the UK for a minimum of 2 years. Minimum gross income of £25,000

ukay2:


Should one go for 2years fixed rate at 6% or 5 years fixed rate at 5.5% now, please.

Zahra29:


When the seller accepts a higher offer from someone else and decides to sell to them instead

Zahra29:


It depends on your risk appetite. Many buyers are opting for a 2yr fix in the expectation/hope that rates will be lower from around 2025. Rates are forecast to fall in the medium term but it is also being cautioned that the era of ultra low rates is over and the new normal will be around 5%. So a 5yr fix at 5.5% may be close to where the market settles in the long run.
It comes down to what you're more comfortable with. The assurance of knowing what your fixed payments are for 5 years regardless of which way the market moves, or taking a gamble on rates being lower in 2 years, which might go either way.

tshoboy:

Oga lexus, can you add some numbers to this so some of us about to start this journey understand and take advantage of this.

Lexusgs430:


Let's assume your mortgage payment is £400 pcm........

By paying £100 extra every month, it would drastically reduce the length of your mortgage payment + paying less interest.......

ukay2:


What if the mortgage payment is £2000 pcm?

Lexusgs430:


That's £500 extra.......