London is known for many things, including historic architecture, diverse culture, contemporary attractions… and high property prices. There are endless reasons why you might want to live in the capital, but funding a property purchase can be tricky. If you’re eager to buy your own home and you’re reluctant to leave the bright lights of the City, take a look at these three ways you can finance a property purchase in London:
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1. Rent to Buy
If saving for a deposit is delaying your plans, a rent to buy agreement could be the ideal solution. Under these contracts, you agree to pay a specific amount of rent for a pre-agreed amount of time. Once your lease expires, you’ll have the option to purchase the property. Usually, the rental payments you’ve been making will be deducted from the purchase price. In addition to this, some rent to buy agreements ensure that ownership of a percentage of the property transfers to you with every payment you make.
Many rent to buy schemes are government backed, which means they’re only available if you fit the eligibility criteria. Although some property companies also offer these schemes, you will be restricted in terms of the property that’s available.
2. Bridging Loan
If you own a property but you’re eager to move, bridging finance can facilitate a fast purchase. With bridging finance services from Enness Global, you can find competitive rates from over 300 lenders and create bespoke agreements. What’s more – Enness Global will provide expert advice so you can ensure you’re making the best financial decision for you and your family.
Bridging finance allows you to fund a property purchase, even if your existing home hasn’t yet sold. This is a great way to ensure you don’t miss out on your dream home and allows you to move at a time that suits you. With a bridging loan in place, you can buy a new home without taking out a second mortgage, which means you can increase your borrowing power and find the home of your dreams in London.
3. Rental Income
If you’re willing to share your new home with a tenant, the potential rental income could be factored into your mortgage applications. This should enable you to borrow more funds, which could finance your property purchase. If you plan to live in the house, this won’t be a traditional buy-to-let investment, but it can be a viable way to access the additional funds you need.
However, not all lenders will be willing to include potential rental income when calculating your mortgage offer. Due to this, you might need to shop around or speak to a specialist broker who can help you find a mortgage provider who meets your needs.
Reduce the Cost of Buying a Property
When you’re buying residential property, there are lots of things to consider. From stamp duty and capital gains tax to the cost of renovations and real estate fees, you’ll need to factor in the expenses you’re likely to face before you commit to moving forward. By taking a proactive approach at every stage and calculating your budget in advance, however, you’ll find there are a variety of financial tools to reduce your tax liability and lower the cost of buying a property in the capital.