Do I need BTL mortgage while travelling?

chivas

Hi,

I am thinking about going travelling for 6 months next year. I currently have a mortgage with Halifax (About 70% LTV atm)

I have a friend who is happy to move into my place, tend the cats and cover the mortgage costs for the six months. I'm concerned that because she is paying this I need to have a BTL mortgage?

Can anyone advise me if this is necessary? Obviously I would rather avoid the expense and hassle of changing my mortgage terms - but I don't want to get in trouble!

Thanks!

tbs624

If you are in effect letting the property then you need to seek your mortgagor's consent to let - they ask you to switch mg or they may just levy a fee, but that's just the start of your obligations as a LL.

If you are going to be out of the UK then you must have an agent to act on your behalf. This does not mean that you have to use a "Letting Agent" but that someone in the UK can act on your behalf relating to the property.

You willneed to tell your house insurance company and you may need to switch to specific LL insurance, then there is gas & elec safety, declarations to HMRC ...do a forum search on new LL questions....here's a start http://forums.moneysavingexpert.com/showthread.html?p=13865307#post13865307

Much depends on whether you friend is coming in as a housesitter for you, but if that were the case then generally you'd be paying her...if she's paying you then it looks more like a LL /T relationship IMO, and generally you'd surely want/need the protection of a formal agreement if you were leaving your property in the possession of someone else for an extended period of time.

MarkyMarkD

If you are talking about an informal arrangement for six months, I'd argue that you don't need to get your lender's consent. But by not having a formal tenancy agreement, you are taking on some degree of risk - as is your friend/tenant.

If the amount the tenant will pay is less than the "rent a room" limit then that's probably the best way to deal with the income.

Otherwise, you are going to have an issue with the income exceeding the allowable costs, if your mortgage payments include an element of capital, as only the interest element is allowable. Whether you are going to make a taxable profit or not, you need to notify HMRC that you are letting your property, if you go down that path.

You may also need to notify your insurer that you have someone else living in the house.

Hope that helps.

chivas

Thanks for the reponses.

While my friend is housesitting for me, she is also paying my costs in return for the full use of the flat while she is there. I preferred a friend rather than strangers to be in my home - plus it means I can leave some of my possessions there

My friend will be able to take care of small issues herself, and I have already someone to be poc for larger issues.

My mortgage is interest only, and I don't think the income will exceed the rent-a-room yearly allowance.

But I don't want to leave either myself or my friend at risk!