Buy-to-Let mortages - do I have to?...

tristan727

Switch to one when we only own one property, & we have to rent it out? Basically I've moved out of London to the South & am renting down here, and renting out our flat in London as were only getting stupid offers for it, from the various vultures about.

We're no wannabe landlords, just stuck in this downturn like many others who can't sell & so rent out, and the idea that we have to be treated like one, with the extra costs of switching mortgages, etc. makes me bit angry....which will turn to quite angry if we have to pay this £250 cost I believe our mortgage provider wants & all the tax implications Gordo's thought up, no doubt. It's already ridicously expensive enough - this higher management fee the agents like...the only thing they seem to manage for the extra 5%, is all the extra costs to charge us for, that weren't mentioned when we agreed to go through them.

boyse7en

Yep, you are now officially a BTL landlord.
You will need a Buy to let mortgage, your existing mortgage supplier may allow you to alter your current mortgage, or they may insist you pay it off and remortgage. Either way you are likely to be paying a higher rate. They may also insist that you provide proof that your expected gross rental income is at least 125% of the interest on the mortgage.

Remember that you will also need BTL house insurance, as your standard building and contents insurance probably won't cover it.

cheletastic

Boyse7en is right.

If you continue to rent out your property without changing to a BTL mortgage, your insurance will be void. Also, if you don't have a BTL mortgage, any tenancy agreement you have with your tenants is also likely to be void.

T._x

Different dircumstances but I did the same thing end of last year. I just notified my lender (Nationwide) in writing of our intentions, and the reasons, which they approved albeit with a list of around 8 terms, one being it's only for 4 years (initially). Fortunately for me no extra fees and no switching costs.

It is something you'll have to do as in addition to insurance being invalid etc as cheletastic mentioned, if any of the conditions applying to your mortgage are breached, they would have the right to take action and they could potentially renege on your deal.

PasturesNew

You could think of it in terms of cars.

If you'd bought yourself a nice Rolls Royce, to look good in .... and couldn't afford to run it so started using it as a wedding car, just on Saturdays until things changed, you'd expect to pay higher insurance for the fact it is now a business and there are extra risks.

That's just life.

Old_No.7

Does your bank not give you the option of a Consent to Let? That's what we got - we're with Alliance & Leicester. At the time it cost £125 for 3 years, but I think it's gone up to £99 pa recently.

zebedy

I'd suggest you contact your mortgage lender and tell them you are thinking of letting our your property and ask them for all the details concerning their Consent to let.
There is usually an admin fee and certain conditions and sometimes they change your interest rate.

It all depends who your provider is. Abbey and nationwide are known as quite good for Consent to Let but Halifax change your interest rate to match their BTL mortgage rate.