Consent to let with NR, can anyone help please?

pinkswinny

Hi, my hubby and I want to let out our house. When we bought the property 18m ago he was going to leave the army and find a new career and we were going to live in our house. Since then the credit crunch hit and he has been unable to leave his job. We have since decided that he is going to stay in the army. In this time we have been living apart because he has been based elsewhere, and I have been living in our house with our daughter. We hoped to rent out our house and move into an army quarter. Having read though the letting criteria from NR, I am a bit confused, can anyone help?

It says, "The letting arrangement is self-financing ie, the rental income is sufficient to cover 120% of the mortgage repayment on an interest only basis including an un-secured loan"

How would I work this out?

Our mortgage repayments are currently £699 pm, and our unsecured load £134 per month. We are coming to the end of our fixed rate in October and as we are in neg equity are being forced onto a SVR.

Also it states, "The loan to value of the mortgage does not exceed 70% (including any unsecured loan) This can be calculated by using the outstanding balance of the mortgage account divided by the current value of the property"

We bought our house for £110,500, the mortgage is aprox 107,000, we have a secure loan aprox £6,000 and an unsecured loan of about £20,000. Its the NR 125% together mortgage. I owuld guess our house would probably be worth about £90-95,000, by looking at other houses that have sold recently in our road.

Does it look likely that we would be allowed to let it or would they reject us? We have no savings, and are barely getting by. I desparatley want to leave the house and live with my hubby, it is causing us so much stress. What would happen if we couldn't rent? WE would have to sell I suppose, but that could take a long time, could we voluntarily repossess?

I hope somebody could help, I'm sorry that it is long, I;m just so confused right now, thank you

Berkshiregirl

On paper at least they would not give you permission to let the property - your LTV is about 115% based on the figures you give (without the loans), which is well over the 70% it says on your letter. The rental fees would need to be £1,000 per month to satisfy the 120% requirement.

That said, you really are best off calling them and having a chat.

kingkano

I think you already know the answer, according to those terms NR will not give you permission to let the property. Your LTV is way over the 70% allowed.

TO calculate the self-financing you'd need to work out (using a mortgage calculator) how much your interest only repayments will be on SVR (including the unsecured lending). Then times that by 1.2. This will give you the rent you need to achieve. I'd guess you'll find the figure quite high and not be likely to get that in rental?

I dont know about voluntary repossession (you'd need to seek advice on this). But do remember you will still be liable for the difference between the final selling price and what you currently owe. NR may not get you the best price. You would be better off trying to sell yourself first.

As a last word, have you even phoned NR and asked yet? They have the final say whatever your contract says. They will either agree or won't and then you will atleast have that part of your confusion sorted good luck.