Do I have to switch to a buy to let?

lauraschild

I own a flat which I lived in for 2 years before relocating for work. I now rent it out to cover my mortgage and am renting in my new location. My fixed rate is up at the end of September so I am looking for a new mortgage. My broker says that I need to switch to a buy to let because I'm not living in my flat anymore. However I didn't buy to let it, I don't own more another property and I may well move back there at some point (my company has just announced that its office is going to close in the next few years so my job here isn't very secure). All the buy to let deals around at the moment are crap and my mortgage repayments wouldn't be covered by my rent. Do I have to switch? Do I have to even tell my mortgage company that I am not living there at the moment?

Gorgeous_George

You need permission to let if you wish to avoid the wrath of your mortgage lender. You do not need a BTL mortgage.

silvercar

If you look for a new lender, you have to give them the true facts to make their lending decision. This means that as the property is currently let you have to look for a mortgage that will allow you to let the property. Generally this means a BTL mortgage. There may be occasions when the odd lender will give you a new mortgage with consent to lease if there was clear evidence that you were moving back at a certain time, though this is rare.

As the rental income won't cover the mortgage it is very unlikely you will be able to get a BTL deal at a decent rate, or possibly get any BTL deal.

This means that you will be stuck with your current lender. Find out what deals they will offer you.

As for whether you tell your current lender you are letting the property? You should really, you tenant is not protected from any repossession action by the lender if they are unaware of the tenancy. You are also in breach of your mortgage terms, so technically the lender could demand the mortgage be repaid. Though this is highly unlikely if you are keeping up with repayments. There is also the risk that the lender find out if the tenants inform them or post is returned.

The bottom line is that it probably won't be possible to switch to a new lender so see what deals the current lender will offer you.

Make a separate phone call to ask the lender their position on you letting the property and decide if you can tell them from their response.

Gorgeous_George

Of course, the MSE thing to do would be to sell it and let the monkey go.

GG

delboypass

If you rented out through a leasing agent, they should have checked that you have permission to let out your flat within the terms of your current morgage.

This is because an AST is invalid if you dont have permission.

You will also need to be a registered Landlord, keep the deposit in one of the secured schemes so i dont see how you have gone about this in the right way.

If lending out, you need to check with your morgage company asap and ensure you have proteced deposit and registered according to your countys bylaws.

lauraschild

I'm renting it myself, not through an agency. I did look through my mortgage documents when I first let it to see if I could and I couldn't find anything which said I couldn't. I've just heard now I'm looking for a new mortgage that I need to switch to a buy to let. Would there be any reprocussions from my mortgage company if I tell them now I have been letting it for over a year? You are all scaring me!