Renting my house - Help!

asfenton · 10 January 2009 at 12:11AM

hi,

I was hopng someone might give me a few tips and offer some advice about renting my house.

Myself and my wife will shortly be moving back to be closer to our families but only recently bought a house, which we are reluctant to sell at the moment. We will be moving in with her mum and dad so don't need to find another house just yet.

What I would like to know firstly is are mortgage providers allowed to stop us from renting it out for whatever reason?

And secondly, what sort of fees do estate agents charge for looking after the lease/rental agreement?

Any help will be greatly appreciated,
Adam

mongster · 10 January 2009 at 12:51AM

Hi, you need to check with your mortgage provider some institutions will let you rent out your property wilst remaining on a residential mortgage but with a one off fee. Other lenders will more than likely want you to switch to a buy to let mortgage which may incur exit fees. As for fees to find and manage your tenants factor about 10% of the rental income and dont forget to get quotes for landlord insurance. I`m no expert so speak to your mortgage provider in the first instance. regards

LoopsYorkshire · 10 January 2009 at 6:36PM

I can personally say I think there are a lot of people out there who maybe rent out their property and dont tell their mortgage company! Some mortgage co's may make you make a payment for the fact you are renting out or has already said poss change to a buy to let mortgage and poss your payments may go up.

You could be naughty and just start to rent it out and see how it goes. The market might pick up in 6 or 12 months and then you might decide to sell.

Regarding fees for renting out a property - I really think they vary from one agent to another and depends on what services you want them to carry out for you. Shop around that it what I would say!

TonyB67 · 10 January 2009 at 8:17PM

If you have a normal residential mortgage, then you wil probably be not allowed to rent out your property. However, if you inform your lender of your intentions, they will either charge a yearly fee or change the interest rate you are paying or switch you to a Buy To Let mortgage.

As regards to fees lettngs agents charge, it is normally 10% of the total yearly rent to introduce a tenant with a further 5% to manage the property for you.

Dee-Dee · 10 January 2009 at 11:09PM

I was thinking of moving to London last year and wanted to keep my house up North. I am with HSBC and asked them whether it would be possible to rent my house out and they sent me a letter saying yes. I was really surprised as I expected there to be some financial implications. Obviously the economic climate has changed since then but I reckon it is still worth asking.

Vampgirl · 11 January 2009 at 11:54AM

LoopsYorkshire wrote: »

You could be naughty and just start to rent it out and see how it goes. The market might pick up in 6 or 12 months and then you might decide to sell.

But do be prepared for prospective tenants to ask if you have permission to let from the mortgage lender if its not a BTL mortgage. Its fairly easy to identify which properties are being rented out for the first time after being a family home and as a tenant myself it does set alarm bells ringing and make me ask more questions about the mortgage status and the landlord's plans for the future. As a tenant I wouldn't want the landlord to be selling in a couple of year's time, and the mortgage questions are very relevant in case the landlord falls behind on the mortgage and the property gets repossesed. Only a couple of days ago we looked at a very nice house but in the end rejected it as they were only renting it out because they couldn't sell it for a high enough price and would probably have sold it as soon as the market picks up enough.

Had we decided to go for that house then I would have wanted to see evidence of BTL mortgage or permission to let from their lender...some people would say that I have no right to see these, maybe not, but if the landlord had refused I would have been perfectly happy to walk away - as a tenant you have to protect yourself as best you can.

kazmc · 11 January 2009 at 12:16PM

Well I had the estate agents in yesterday to value my home for rental and they are charging me £675 + VAT to find a tenant and get everything set up. This is for a 12 month contract with a 6 month get out clause. I can also pay an additional £165 to have the rent guaranteed (through an insurance co) Then there are the inventory fees if you want them to do it £200 and the gas safety and energy certificates another £75 each.
When I asked the question 'do I need to let my mortgage company know' she said.... we have to tell you yes but we do not ask for proof of this and winked at me!! and this was one of the major high street estate agents so make of that what you will!!!!!
All the above figures are based on my house renting out for £950-£1000 per month
HTH

Karen

abouttimetoo · 11 January 2009 at 12:25PM

Hi Asfenton

As the others have said you will need to check your own terms and conditions but in my case I had to apply for 'Permission to Let' which was £125 and then pay a £399 fee to convert my mortgage to BTL. The other thing I had to do was satisfy my lender than the monthly rental income would be a minimum of 125% of the mortgage payments, this is an attempt to safeguard you to cover the periods when your propery may be un-occupied.

My letting agents charge me different finders fees depening on how long tenancy is plus a monthly fee

tsb · 11 January 2009 at 1:07PM

Another expense to pay on the rent is TAX. This is before the mortgage is paid

franklee · 12 January 2009 at 3:49AM

kazmc wrote: »

Well I had the estate agents in yesterday to value my home for rental and they are charging me £675 + VAT to find a tenant and get everything set up. This is for a 12 month contract with a 6 month get out clause. I can also pay an additional £165 to have the rent guaranteed (through an insurance co) Then there are the inventory fees if you want them to do it £200 and the gas safety and energy certificates another £75 each.
When I asked the question 'do I need to let my mortgage company know' she said.... we have to tell you yes but we do not ask for proof of this and winked at me!! and this was one of the major high street estate agents so make of that what you will!!!!!
All the above figures are based on my house renting out for £950-£1000 per month
HTH
Karen

Hi Karen,

That leaves your tenants in a vulnerable position should the property get repossessed as they can be asked to leave without notice. Some landlords even let the property after repossession proceedings have been kicked off. As tenants are waking up to this expect to be asked by the tenant if there is consent to let and for a tenant who finds there is not after they move in (say by having letters from the lender arrive) to inform the lender. I asked an agent if there was consent to let and they told me there was no mortgage, luckily the land registry told me the truth. I did inform the lender.

Perhaps you need to look at trusting your house to a more professional agent. As a tenant the charges the agent makes to me and how well they look after me (or not) matters a lot. I'll cross Andrews Estate Agents off then!

beingjdc · 12 January 2009 at 7:05AM

Vampgirl wrote: »

But do be prepared for prospective tenants to ask if you have permission to let from the mortgage lender if its not a BTL mortgage.

And for your insurance company to refuse to pay out if the tenants set fire to it but you hadn't told them you were renting it out, which you may not be able to if you're not telling your bank.

Renting my house - Help!

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