Thank you very much guys, you certainly saved us some time and money and now I know what we need to do... cheers

It shouldn't make any difference whether you've got a residential mortgage or not - the BTL is a commercial proposition so should be able to cover its own costs and make enough of a profit to allow for voids and other unexpected costs.

If you are both higher rate taxpayers then it would probably be a good idea to put the BTL in joint names as you would then get two CGT allowances when you come to sell it which will save you some tax.

Tt lady,

Thank you very much for your answer. We are both higher rate tax payers, so I suppose tax wise it wouldn't make a difference for us; and about the BTL mortgage, yes I knew it needs a large deposit, but from your answer I understand that it is not necessarily related to our income at all.
Does it mean that it doesn't make any difference if the BTL applicant has a mortgage under his/her name or not?

Thanks again,
Kind Regards,

Nazli

The tax question depends on which tax bracket you both fall into at the moment and how much profit you're expecting to make on the BTL property. If one of you is a higher rate tax payer and the other will remain a basic rate taxpayer after allowing for the BTL profit then the best solution taxwise is to put the BTL in the name of the person who will only pay basic rate tax.

For tax purposes it doesn't really matter how you structure your first property unless you've got lots of assets and are likley to fall into inheritance tax.

You'll need a reasonable amount of savings if you want to buy two properties as BTL mortgages will only be 60 - 75 % LTV and you'll also need rental income of 125% of the interest element of the mortgage payments. BTL mortgages are usually based on the rental income rather than your salary as they are seen as a commercial decision which should be capable of making a profit.

Hi all,

I am a first time buyer and thus I don’t know much about mortgage market. My husband and I want to buy our first house within the next one or two months. We have two different strategies and we don’t know which one works better. Our aim is to buy a property to live in and buy another one as an investment property after a year or so.

Our first option is to buy our house based on my husband income only and put an individual mortgage application in and then we can buy a “buy to let” property based on my income in the next year or so.

The second strategy is to buy our house based on both incomes and then apply again together for another mortgage after one year or so for a buy to let property.

My concerns are:

1. Which option is better in terms of mortgage application, would it be easier to apply for BTL mortgage if I don’t have any mortgage or if I do have liabilities for our residential mortgage

2. Is any of these options better in terms of taxes?

Many thanks in advance for your help

Kind regards

Nazli