Been refused consent to let by Halifax

emmajayne1982

Hi Everyone,

I had a meeting with the Halifax yesterday to get consent to let and it's looking like it's going to be refused. Here is the background:

My partner is a helicopter pilot and has been relocated to Aberdeen. I was living in Leeds at the time and after 10 years together decided that we could not live that distance apart so I decided to move up with him. I owe about 90% of the total value of my property (based on their indexing) and therefore the branch need to put a business case forward for the consent (if I owed less that 75% there would not have been a problem).

The lady in the branch called head office who told her that as I moved out of 'choice' and because we were not married (regardless of how long we have been together) it would be refused. Apparently they will only grant it if the move was out of necessity. In my opinion I had not choice in the matter since a relationship between Leeds and Aberdeen would just not be possible. The other problem is that he is not named on the mortgage since when I bought the house he was living in the USA doing his pilot training.

I am now faced with a difficult decision.Do I sell the house and risk losing about £20k on what I bought it for - or even not selling it at all. Or (slightly controversial) do I let it out anyway? I know some of you won't agree with this but I find it completely crazy that they won't let me rent out the property when it will achieve enough rent to cover my mortgage but won't be making me a penny of profit.

Incidentally the lady in Halifax filled me with complete rage- she seemed to think the situation was amusing and said 'the other option is you make up the % difference - totaling £25!!!'

Has anyone been in a similar situation? Please help!
Emma

VIGILANT22

It is not controversial at all...you will be in breach of you mortgage conditions if you let out this property without consent..remember 90% of this is in fact owned by Halifax.!!...for some reason or other borrowers seem to forget this...

If you had to claim on your insurance whilst you had tenants any claim would be null and void...Halixax could them call in the loan and hold you respnsible for any additional charges incurred by damage.

In fact reading your thread fills me with rage thinking it is your right to do with a property what you want to do just because it suits your circumstances....and even mentioning about "but won't be making me a penny of profit"

beecher2

Are you on a fixed rate, or tracker/SVR? If the latter, how will you afford it when rates go up if you wouldn't make a penny of profit at the moment.

Sell and move on would be my advice.

Cannon_Fodder

You could view the idea of filling the gap between 90% and 75% as simply the early repayment of some of the mortgage.

If you intend to keep it as your 'pension', as some people do, there's no point staying at 90%, as there's no equity cushion to draw on in later life.

It has to be paid off someday, doing a chunk early allows you to keep more of the rent, or provides a buffer in the event of void periods.

emmajayne1982

I was only asking for advice - and you have given it but no need to be so rude about it. It was actually a financial adviser that suggested that I let it out anyway.

I was only making the point that I am not wanting to rent the property to make some money but that circumstances change and that I was quite shocked that they might refuse my reasons. The other fact is that I know their valuation of my property is incorrect as similar properties in the area are selling for about £10k more.

I am on a fixed rate for 3 years so my rate will not change.

I understand the reasons for paying off a chunk of the mortgage but I don't have a spare £25k floating around.

I appreciate your advice but I think as an 'advice forum' you could be a little more polite.

silvercar

Some people have personal axes to grind against anyone letting their property.

If you do let it without consent then make sure you have the correct insurance ie one that allows for tenanted properties.

The bottom line is that you have to pay the mortgage; I've not heard of anyone repossessed for keeping up with repayments. You do risk the halifax increasing the rate if they find out you have let without consent.

VIGILANT22

[QUOTE=emmajayne1982I_but_I_think_as_an_'advice_forum'_you_could_be_a_little_more_polite.[/QUOTE]

no advice here..that's what advisers are for (or should be & not encourage you to beak T&C's of yr mortgage)
this forum is where you receive opinions
you may not like mine...but that is the chance you take when you throw a question open
just as i dont like yr thoughts on being refused consent
ask yr partner to invest in the property with you & change it to a btl...it is a solution

madeupname1

silvercar wrote: »

Some people have personal axes to grind against anyone letting their property.

I have only been on the forums a few days, but what Silvercar says is right.

See what the response is. If its negative I would definately push them to reconsider and perhaps try to get the name of someone higher up the chain of decision making. The facts as you present them here seem reasonable and someone with greater decision making authority may reconsider. I struggle to understand why they would say no except where where is going to be some kind of deterioration in your financial situation (for example would you be quitting paid employment to move to Aberdeen?). Also find out what they do if you do let without consent. My mortgage company said that they would charge an additional 1% on the interest. Even with that charge, the mortgage was still affordable. In my case it didn't come to that and I was moving through choice.

emmajayne1982

Thanks madeupname1. I have actually been offered a better paid job in Aberdeen so it would in fact be a better situation for me financially.
When they call me - which will be later on today/tomorrow I will ask what would happen if I rent out anyway.

VIGILANT22

[QUOTE=silvercarSome people have personal axes to grind against anyone letting their property.

I have no axe to grind..in fact I am an investor myself with a portfolio...what I do have "an axe to grind" with is irresponsible borrowers..and people thinking they can do what they like with a mortgaged property ...in this case 90% of it is owned by the bank...

G51shopaholic

you need to be careful what you do.

I worked in a Letting Agency for over 7yrs and we always had to get a copy of the permission to let from the landlords mortgage provider.

This was to protect our company and protect the tenants that we moved in. You also have to have specialist insurance cover via a Landlords Policy. Otherwise your buildings & contents insurance is null and void.

If you intend to move to Aberdeen you could consider letting it to a friend or family member - again if things don't work out for you in Aberdeen you would need somewhere to move back to.

You may not like what Vigilant22 is saying but he/she is right - although a little blunt it is good advise.

If Halifax had given permission to let then they would also have been entitled to a % of the rental income. They would also have switched you to a different rate for "commercial" mortgages as the property would not have been your main residency.

then you have the Inland Revenue etc.

It's not just a case of finding a tenant, you have gas safety checks, electrical safety checks, landlord registration fees, etc etc.