My First BTL

joaomanuel

Hello,
I have recently bought a property in London using a BTL mortgage.

Ideally, I wish to configure it as 3 bedrooms to let individually, and have individual rental agreements for each room. I already have tenants ready to move into those rooms. Then there is another room that I will keep for myself for ocassional use when I need to stay in the city.

The problem is that officially my mortgage provider requires a single assured shorthold tenancy agreement for the entire property. Obviously this would be complex with different tenants, let alone the fact that I wish to keep one room for myself.

So I guess my main questions are:
Assuming that the mortgage is always paid on time, which will not be a problem due to good deposit and other income sources, how strict are mortgage providers in enforcing their regulations?
Are they likely to check the tenancy agreement?
What is the worst that can happen if I rent 3 individual rooms and they find out?

Any other advice would be much appreciated.

Thanks.

Joao

ILW

You will need to register the property as multiple occupation. This carries all sorts of legislation regarding things like fire escapes etc. If you do not you could not only be in the XXXX with your building society, but also with the council. I believe you would be commiting a criminal offence.

socrates

joaomanuel wrote: »

Hello,
I have recently bought a property in London using a BTL mortgage.

Ideally, I wish to configure it as 3 bedrooms to let individually, and have individual rental agreements for each room. I already have tenants ready to move into those rooms. Then there is another room that I will keep for myself for ocassional use when I need to stay in the city.

The problem is that officially my mortgage provider requires a single assured shorthold tenancy agreement for the entire property. Obviously this would be complex with different tenants, let alone the fact that I wish to keep one room for myself.

So I guess my main questions are:
Assuming that the mortgage is always paid on time, which will not be a problem due to good deposit and other income sources, how strict are mortgage providers in enforcing their regulations?
Are they likely to check the tenancy agreement?
What is the worst that can happen if I rent 3 individual rooms and they find out?

Any other advice would be much appreciated.

Thanks.

Joao

No disrespect but why did you not look into this properly before you bought the property.

It may have been possible with the help of a good broker for this to have been a normal residential mortgage rather than BTL. Especially as you are also staying there.

I think you need to visit LandLordzone.com and ask the same question there.

PasturesNew

Thoughts that went through my mind when I read your posting:

- If you are living there, the people are lodgers, not tenants.
- If 4 unrelated people are living in the property it is likely it might be an HMO and potentially needs a license.
- Getting contents insurance will be difficult with so many lodgers - make sure you are insured properly.
- If it's a BTL mortgage, you might not be allowed to be living there.

The worst that could happen if your mortgage company found out is they could give you ONE MONTH to settle up the mortgage debt in its entirety. They might simply withdraw the mortgage because you've not adhered to the conditions. Then you might find nobody else will mortgage you (for a variety of reasons, including this mortgage being withdrawn). Those are the worst/might things I can think of.

joaomanuel

ILW wrote: »

You will need to register the property as multiple occupation. This carries all sorts of legislation regarding things like fire escapes etc. If you do not you could not only be in the XXXX with your building society, but also with the council. I believe you would be commiting a criminal offence.

Thanks for the tip, I have spoken to the council and the HMO does not seem to apply as there will be not enough occupants (less than 6) and the property is on 2 floors. Will get this in writing as well.