Renting out our home

Lullabelle_2

I hope I have posted in the right forum (apologies if not).

For several reasons my husband and I are considering letting our 2 bedroom house out and moving in with family for a year. A friend of my husband is interested in letting our home and the mortgage company have said it shouldn't be a problem so long as our income covers the mortgage.

I have some questions which I hope someone can help with:

-If the rent only covers the mortgage and we don't profit from this (just breakeven) then do we have to declare this in a tax return?

-What are our legal obligations? The bank wants to see a tenancy agreement and change of insurance which is fine but do we need to have certificates for gas, electricity etc?

Many thanks for reading this, any advice would be appreciated.

poppysarah

You'll need a gas certificate and an EPC

http://www.communities.gov.uk/planningandbuilding/theenvironment/energyperformance/homes/energyperformancecertificates/landlordsbuilderssolicitors/

Lullabelle_2

Thanks so much for such a quick response Poppysarah. I will have a look at the link.

naijapower

You have to declare on your tax return even if it is a loss

MX5huggy

-If the rent only covers the mortgage and we don't profit from this (just breakeven) then do we have to declare this in a tax return?

Only the intrest elment of your mortgage can be set agaist the rental income not the repayment bit.

Lullabelle_2

oh right, maybe I should look on HMRC's site to make sure I get it right. This is the side of it all that worries me.

I had a feeling it wouldn't be very straightforward!

Thanks again.
L

barnaby-bear

Lullabelle wrote: »

I hope I have posted in the right forum (apologies if not).

For several reasons my husband and I are considering letting our 2 bedroom house out and moving in with family for a year. .

The description "Home" is a bit worrying.... it won't be your home any more, it will be a rental property, subject to fair wear and tear and you can't keep popping in to "inspect". You will have to mainly empty it and store your own belongings (hiding stuff in the loft doesn't really work) and if you are at all precious about decor/furniture - alarm bell time.... also letting for one year be careful of the tenant referencing if you get someone who doesn't want to move at the end.....

Lullabelle_2

barnaby-bear wrote: »

The description "Home" is a bit worrying.... it won't be your home any more, it will be a rental property, subject to fair wear and tear and you can't keep popping in to "inspect". You will have to mainly empty it and store your own belongings (hiding stuff in the loft doesn't really work) and if you are at all precious about decor/furniture - alarm bell time.... also letting for one year be careful of the tenant referencing if you get someone who doesn't want to move at the end.....

Thanks barnab-bear - I think I may have sounded more affectionate about our house than I intended. One of the reasons we want to rent it out is that we hate living there. We would sell it but we're tied into our mortgage for a while and we want to save a bigger deposit for our next house. DH has been offered a job 70 miles from where we live now and I am on mat leave until next year so its a good time to do it.

I hope never to move back in to be truthful!

I appreciate what you're saying about it being looked after, DH's friend & his partner are responsible enough and if they don't rent it we'll go through an agent.

mlz1413

With all rentals and esp to friends ensure you get all the paperwork done, its very easy to not discuss important matters and it's very British not to discuss money.

But be upfront from the start and get all the paperwork done and it will hopefully be as stress free as it can be. My neighbours a few doors down have rented their house to friends which enabled them to move 20 miles away to a village they love, they are all still friends and everything works well.

Lullabelle_2

mlz1413 wrote: »

With all rentals and esp to friends ensure you get all the paperwork done, its very easy to not discuss important matters and it's very British not to discuss money.

But be upfront from the start and get all the paperwork done and it will hopefully be as stress free as it can be. My neighbours a few doors down have rented their house to friends which enabled them to move 20 miles away to a village they love, they are all still friends and everything works well.

Yeah, I can see how it could be awkward. Fortunately, the mortgage company want contracts signed so I feel happier that we have that as a starting point.

Ideally we'd just sell the house and be free of it but this seems the only way for now.

Thanks everyone for your advice, I am grateful - I don't want to find we do this and then something pops up that we hadn't considered so thank you!