Thu, 30 Nov 06
Many first-time buyers take their first step on the property ladder by letting out rooms to help with the mortgage payments, but now mortgage lenders are offering progressively larger mortgages to those specifically intending to share a room or two.
Stroud & Swindon has announced a ‘buy-to-share’ financing option will now be available on all its residential mortgage products. This change will mean that consumers can increase the amount they are able to borrow by taking into account income gained by renting out a spare room.
Takers of the Stroud & Swindon buy-to-share mortgage are able to add £4,250 to their annual income for the first room they are planning to rent. This amount represents the level of income you can make from renting out a room in your home without having to pay income tax.
Borrowers can then add a further £2,125 onto their income for a second spare room this amount is lower as it reflects the fact that income tax will be payable on any rent gained in excess of £4,250.
Stroud & Swindon believes that this is the first time that this type of financing has been available across a provider’s entire range for purchases and remortgages. The maximum and minimum amount that can be borrowed depends on the individual mortgage deal chosen.
Paul Chafer, sales director of Stroud & Swindon Building Society commented: As house prices continue to rise steeply, more and more first time buyers are finding it impossible get a foot on the property ladder or are forced to purchase property with friends.
Our new ‘buy-to-share’ scheme takes into account the potential income that can be gained by letting a room and increases the amount first-time buyers can borrow in a sensible sustainable manner.
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