Been refused consent to let by Halifax

phlash

new_home_owner wrote: »

Its too long, and you are very boring, thats why i only read the last bit.:p

That's as much as I would want you to read... I can't stand reasoned points being wasted on, well, I do not have the vocabulary to explain your unique qualities.

new_home_owner_3

_Andy_ wrote: »

All the girls say that to me

they say to me "i dont know whether to do ride it or climb it?":rotfl:

new_home_owner_3

phlash wrote: »

That's as much as I would want you to read... I can't stand reasoned points being wasted on, well, I do not have the vocabulary to explain your unique qualities.

i thought i was on ignore?:rotfl:

VIGILANT22

Best to stop feeding this **!!**!!* troll

Thrugelmir

emmajayne1982 wrote: »

You are probably all going to shoot me down for this but when you talk about the current climate and the lender evaluating risk surely the risk of me defaulting on my mortgage payments is hight without tennants in the property?
I am paying out for rent in my new house as well as my mortgage?

No not shoot you down at all. Your lenders aim is out to make a profit on lending money, that's it. In the case of mortgages with as little administrative cost as possible.

If they don't lend money to you they can lend it out to someone else at a lower risk. So from their perspective its better to lend the money to someone else. Banks are contracting their lending books and over time lending margins will rise. So even if bank base remains low the cost of money in the market will edge upwards in the longer term.

In the same way you need to put your business hat on. This will no longer be your home. Can you let your property on a gross rental of 125% of mortgage repayments? If interest rates rise 3% will the let still be profitable? Are you relying on purely the property market to rise to make a profit? Who is going to manage the property, and deal with emergency issues? What happens if I don't have a tenant for 4 months?

Don't forget net profit, gross rent less costs deducted, is taxable.

There's a lot to think about. Everybodys circumstances are different. Working abroad and letting for a short period is different to retaining ownership of 2 houses for an extended period.

If you wish to argue your case go to your lender with facts numbers, ie a business plan. Prove to them its viable.

jessicar

emmajayne1982 wrote: »

jessicar - thank you for your helpful posts - could you just elaborate on why you think not renting is a good idea with the equity levels in the property? My understanding is that if I wait a little while to sell then I may be able to get back the £22k that I invested in the property in the first place.

Ok, using the example of my neighbour who has very little equity in her house, and me because I have a lot...

Just say we can both rent our identical houses out for £1200 per month,(made-up figures), but her mortgage payments are £1100 per month and mine are £200.

There are additional costs you have to pay such as repairs whilst the tenant is in there, letting agent fees (if you choose to use them), often costs of cleaning/repairing the house between tenants, any legal requirements, etc.

Then both our tenants leave, and we can't find anybody for 4 months (as just happened to her in real life).

Hopefully, since I've been getting an extra £1,000 a month in excess of my mortgage, I would have put some away to cover me for this so it's no problem covering my £200 a month whilst it's empty.

But she would have had virtually no excess money to cover any of her extra costs or put anything aside, and then when the house is empty for 4 months, she's then having to find £4,400 of her own money to pay her mortgage, as well as paying rent in her new place.

Or what if she gets a nightmare tenant who won't pay rent, and has to cover the mortgage etc, herself whilst she sorts the situation out?

You can't always rely on having good tenants who are going to pay up, and that you won't have gaps between tenants or additional costs for letting agents, repairs, etc. Therefore, ideally when renting you should have some kind of financial cushion to protect you if things don't go exactly right.

You're saying that in your case your rent will only just cover the mortgage without making you any 'profit', but it's this profit that you would use to pay for any other costs associated with renting, such as covering periods when it's empty. If there is none, you will have to find that money elsewhere, and can you afford to do that?

I'm not saying you shouldn't do it - but you should at least be taking these things into account when making the decision so you know what you're getting into.

Thrugelmir

emmajayne1982 wrote: »

jessicar - thank you for your helpful posts - could you just elaborate on why you think not renting is a good idea with the equity levels in the property? My understanding is that if I wait a little while to sell then I may be able to get back the £22k that I invested in the property in the first place.

Its a known fact that people are quick to realise gains on profitable investments, but hang on onto badly performing investments.

The rationale is that (a) people hate losing money (b) people hate to admit to having making a bad decision. (c) the value of the investment has to grow.

As I touched on in my previous post is you have to weigh up whether this is realistic. Get the decision wrong and it will cost you more money.

As jessicar pointed out.

You're saying that in your case your rent will only just cover the mortgage without making you any 'profit', but it's this profit that you would use to pay for any other costs associated with renting, such as covering periods when it's empty. If there is none, you will have to find that money elsewhere, and can you afford to do that?

Sometimes you just have to walk away. Your own money may be better spent paying down your own mortgage quicker than subsiding a loss making venture.