BTL or lease without the banks knowlege?

mountaingirl_2

My husband and I are relocating to India for 2-3 years are we want to retain the flat that we bought in SE London two years ago. We bought at the top of the market and can't afford to sell it as we will make a massive loss.

The flat was for 215K and we owe Halifax 185K and are on a 1% above the bank rate mortgage. We have been advised by friends to get permission to let from Halifax -- although we have heard that the banks are now insisting you change to BTL as they get you on a far higher rate then.

Would you advise we go to the bank and ask for a Consent to Let or should we just rent the flat out without telling the bank?

Thanks

Fire_Fox

Who is going to manage the property when you are overseas? Any reputable letting agency will ask for consent to lease.

PasturesNew

If I drive you to the airport in a taxi, do you expect me to have a driving license? What about being insured to carry passengers?

Hey - if nobody sees it'll be all right ... won't it?

I'd only be about 3x the drink driving limit .. but hey, those rules are for other people. I know what I'm doing.

What could go wrong?

DVardysShadow

mountaingirl wrote: »

My husband and I are relocating to India for 2-3 years are we want to retain the flat that we bought in SE London two years ago. We bought at the top of the market and can't afford to sell it as we will make a massive loss.

The flat was for 215K and we owe Halifax 185K and are on a 1% above the bank rate mortgage. We have been advised by friends to get permission to let from Halifax -- although we have heard that the banks are now insisting you change to BTL as they get you on a far higher rate then.

Would you advise we go to the bank and ask for a Consent to Let or should we just rent the flat out without telling the bank?

Thanks

I want to lift your perspective here above the purely selfish. If for any reason you default on your mortgage and the bank repossess, then if you have not informed them, your tenants will be evicted without a second thought. If you have informed the lender, then they will respect the tenancy agreement.

Inform the bank. Don't base your relation with your future tenants on a lie which could see them put on the street and with a financial problem on top.

bitsandpieces

If you don't have consent to let, you'll also have problems with insurance. This could lead to you making a really big loss if something goes badly wrong.

FraudBuster

What about the security of tenure for hardworking families and their children?

http://forums.moneysavingexpert.com/showthread.html?t=1377883

clutton_2

""If you don't have consent to let, you'll also have problems with insurance.""

not true - i have never been asked to prove that i have consent to let by any insurance company in the 10 years i have been a LL

bitsandpieces

clutton wrote: »

""If you don't have consent to let, you'll also have problems with insurance.""

not true - i have never been asked to prove that i have consent to let by any insurance company in the 10 years i have been a LL

I thought it could cause problems if you needed to claim on insurance, though? Sorry if I got that wrong.

DVardysShadow

bitsandpieces wrote: »

I thought it could cause problems if you needed to claim on insurance, though? Sorry if I got that wrong.

I cannot see why. The Insurer knows exactly what risk he is carrying and the fact that the lender does not know does not change his risk.

There is a potential problem the other way, if the Lender does not know, then they are not in a position to insist that the insurance covers letting - in which case the owner would be in breach of a requirement to ensure that the building is adequately insured.

blckbrd

bitsandpieces wrote: »

I thought it could cause problems if you needed to claim on insurance, though? Sorry if I got that wrong.

Notice of Change of Occupancy

It is a condition precedent to the liability of the Insurer that the Insured or an authorised representative of the Insured shall notify the Insurer if the Private Dwelling at the Premises specified in the Schedule ceases to be the Insured’s permanent residence, becomes let, or becomes regularly left unattended.Where the property is already let the Insured shall notify the Insurer of any changes in occupancy (to either Students, Professional/Employed Persons, Relatives or those receiving Department of Social Security (D.S.S.) benefits), or if the property becomes regularly left unattended. Upon receipt of this notice the Insurer reserves the right to amend the terms and conditions of this Insurance.

Some insurers do make an issue of it.

GregH

I too got a mortgage, lived in the property for 2 years and due to the fact i work away from home an awful lot, i decided to move back in with parents and rent my house out.

One quick phone call to Cheltenham and Gloucester and a £250 fee was all i needed to do. The interest rate, monthly payment and term of mortgage all stayed the same.

A colleague of mine went down the other route of not telling his mortgage company. It all spirals from there, i suspect he doesn't have adequate insurance, the deposit has probably been drunk over Christmas, the annual gas inspection doesn't happen for sure and he really dislikes it when i start mentioning tax on his rental income.

Just a few other things to think about.