Should we buy a first home in London or go for a buy-to-let in Edinburgh?
Q My partner and I are living in London and looking to buy our first home. Were planning to stay here for the next couple of years and then move to Edinburgh (my partner is from there and our jobs are easily transferred). Were now considering whether it would be better to buy our first home in London or to continue renting in London and purchase a buy-to-let in Edinburgh with the aim of moving there in a few years time. As first-time buyers, we know that we can get a stamp duty discount  but were not sure if this still applies if we get a buy-to-let in Scotland. Also, if were only planning to stay in London for a few years, were not sure whether it makes sense to buy somewhere here. Weve really struggled to find the information that we need to weigh up the pros and cons of a first-time home in London versus a buy-to-let in Edinburgh, and really dont know what would make most sense from a financial point of view.    One of the pros of buying yourselves a home in London  provided that it doesnt cost more than 500,000  is that, as first-time buyers, you will pay no stamp duty land tax on the first 300,000 of the purchase price. There is 5% to pay on the amount between 300,000 and 500,000 from 1 July 2021. By contrast, if you purchase a buy-to-let in Edinburgh you wont get the benefit of a similar offer for first-time buyers in Scotland. They get the first 175,000 of the purchase free from the Scottish equivalent of SDLT, which is the land and buildings transaction tax. The LBTT will kick in at 145,000, starting at 2%. Then, because your Edinburgh property would be a buy-to-let, you would have to pay an additional dwelling supplement on top. So in terms of taxes on property purchase, buying in London seems to make more sense. Another pro of buying a home rather than a rental property is that you can typically take out a mortgage of up to 90% of the lenders valuation of the property (which is not the same thing as the purchase price). With a buy-to-let mortgage, the most you can typically borrow is 75% of the propertys value, which means finding at least 25% of its value in cash to be able to buy it. But even if getting a buy-to-let in Edinburgh is a feasible financial proposition, you may want to have a long, hard think about how you would cope with the practicalities of running a rental business. Unless you are prepared to use an agent to manage things, you may feel that the stress and responsibilities of being long-distance landlords are not worth the effort.