Rent out property

sarah234 · 18 June 2009 at 8:24PM

Hi
I'm thinking of renting out my flat for a couple of years and have been told by my mortgage provider (nationwide) that this is not a problem and I just need to fill in a form to let them know. My question is that if i'm not living in the property and want to remortgage (when the interest rates start going up again), will it cause problems because i'm not living at the address? Would I need to get a buy to let mortgage or wait until I move back in to the property to get a normal mortgage? Does anyone have any experience/knowledge of this? Also are there any issues with capital gains tax if I decide to sell after renting out for a while? (it's the only property i own)
Thanks for any advice you can give.
Sarah

_Andy_ · 19 June 2009 at 7:16AM

If you move out and rent and then wish to change lender you will need a BTL mortgage.

Jacka87 · 19 June 2009 at 8:18AM

If you are planning on remortgageing then you will prob need to get a btl mortgage if your renting. Why are you wanting to remortgage? If its cos your on the svr then it may be best to fix now on fixed rate mortgage then rent it out, though some lenders may not let you rent unless you are on btl, you need to speak to them to find out.

You dont pay capital gains on your own home. If your renting out and you plan to sell all I would suggest is maybe moving back in for a couple of months then sell. For example I have heard of people with properties they let out and when they want to sell they often move in for a while then sell before moving back to there own home.

confused31_2 · 19 June 2009 at 10:36AM

Do you have to live in it for so long, when you come back to sell, im currently looking to rent my house out, im thinking of doing it for a at least five years, so if im reading right if i decide to sell after 5 years, i could move from my other house into the property i will be letting out for a couple of months and pay no capital gains tax???

soungs a bit dodgy to me but if it saves a few quid it might be a option for me.;)

kiers74 · 19 June 2009 at 10:45AM

Hi

you do not necessarily need a BTL mortgage, you can ask your lender for a "concent to let" that will allow you to rent the property for a fixed time as agreed.

however not all lenders agree to this and it is decided on your own circumstances.

phone your lender and ask. it is worth a try and will save you some fees.

Jacka87 · 19 June 2009 at 10:51AM

Whatever property is your first home is excempt from capital gains. Thus if you move into a house after you have been letting it because you decided to live in it instead of letting, then changed your mind and decided to sell it, you would not play capital gains. However the home you lived in whilst the other was being let would now be subject to capital gains.

Though if you then moved back in, I suppose that would have that excemp also. I am not saying its right, nor have I done it, however I am aware of people who have used or plan to use this tactic in th efuture and they assure me its legal. The issue is you need to prove to the tax man that it was your home you where seling, thus living in it for a period of time.

sarah234 · 19 June 2009 at 11:12AM

Hi
Thanks for your replies.
I'm currently on Nationwide's BMR which is 2.5% but I'm worried that when that starts going up and I want to remortgage that this is going to be difficult if the property is rented out and I might be forced into a more expensive buy to let mortgage, which i really don't want. Nationwide say it's no probem to let out the flat as long as they know about it and it's rented for a maximum of 3 years but I really don't want to be stuck with the Nationwide BMR when it starts going up again. I suppose I can just move back in when i want to remortgage but I just wanted to know if anyone had any experience of this.
Sarah

confused31_2 · 19 June 2009 at 2:05PM

well if your worried about rates going up get a new deal with nationwide for three years then after you have got the deal for three years, request consent to let, then you will be secure in what you know you are paying for the next three years. you could also make your new deal interest only so you will pay less mortgae each month.