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Relative Wants To Buy - Advice Needed

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They're desperate to buy and obviously I'm trying to talk them out of it, its a bad time to buy, but I wondered if anyone here could give their perspective on the situation. It's a little complicated.

He earns 35k/annum and doesn't seem to have a problem getting a mortgage, however he has a small deposit (5%) and wants to buy a 2 or 3 bed house for about 160k. The payments on the mortgage will be about 850 pound a month.

He's very reluctant to rent at the moment because he feels like he's going to lose loads of money by taking on a tenancy. I personally think that's madness, because if he buys a house there's a lot more risk involved in the long term and he could lose a lot more money.

However, it's complicated because he wants to emigrate to a country outside the EU for 1-3 years very soon and seems to have got it into his head that buying a house, and renting it out whilst he's away is a good idea because it means he's got something to come back to.

However alarm bells are ringing in my head because it can't that straightforward, even under a guaranteed rent scheme and the changes to buy to let that have recently been announced must complicate things? Even though he's buying it with a residential mortgage (a lender who I imagine he'll have to get permission from to rent it out in the first place).

Personally I think having a house over here with a big mortgage is a milestone round your neck when you're living in a foreign country outside the EU. Are there any tax implications in this regard that he needs to be aware of?

I appreciate any advice you can give. Thank you

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The trouble you have by posting on a forum is opinions are like buttholes...everyone's got one,dont get involved just say "I wouldnt" or "I would" bla bla,it makes no difference,the housing market is rigged,no one can guess whats next,although i would add I do property maintenance for lazy landlords and if i know the Landlord is residing abroad I lump on extra £'sssss,did one the other week ,tenant told me landlord lives in Switzerland,now I know thats an uber expensive place to be,his house hear is expensive,a can of coke over there is expensive,so I bunged on £50.00 to his bill,when he gets it he will say "thats cheap,glad the job was done quick" :ph34r: gravy

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Kind of in agreement with the big cheese. Maybe it'll work out, maybe it won't. If they are in London/SE, it would have been an OK strategy (providing they don't get a dodgy tenant) to follow for much of the last decade or so. Not so true elsewhere.

I'd stay out of it - and let them get on with doing their own research into any downsides. The obvious thing to consider is currency fluctuations.

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Giving advice to people like this is difficult, if you go in the the full HPC agenda you will probably be written off as a loon, and even if proven right they probably wont thank you.

best approach is gentle caution: "Wow thats a lot to take on, I would be worried about the changing tax landscape and managing repairs from half way around the world, whats the time difference between UK and XXX?"

Anecdotal: I know someone who paid 20% commisson for a "fully managed" letting agent, they didnt communicate any problems at all until he got a letter saying the tenants have moved out and we can't rent your house any more because 'the kitchen is broken'.

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I'd stay right out of it. None of us has a crystal ball, and if you gave advice that turned out to be wrong, and they took it, you'd never hear the last of it. And if they didn't take it you'd probably never hear the last of how wrong you were, either.

In any case, even when people ask for advice, they hardly ever actually want an unbiased opinion. What they want is for you to tell them, yes, great, go ahead with what you've made up your mind to do anyway.

Edited by Mrs Bear

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