Halifax - Consent To Let / Lease

MPlant

I'm wanting to let out my flat with consent from Halifax, but before calling them wanted to get some advice...

I purchased my flat in Leeds in May 2008 (purchase price £106,000) with a 10% deposit. I currently have a mortgage with the Halifax of around £96,000.

The mortgage was secured through a broker on a self certified basis as I was self employed at the time. I took out a 5 year fixed term mortgage at 5.85%. It is just in my name although I live with my partner.

The flat was purchased as a repossesion at a good price; it was renovated in December 2008 with new bathroom, kitchen and interior decor. I suspect the current value is the same as what we purchased it for, if not slightly higher. I called the estate agents we purchased it through in January 2010 to get an idea of its market value; they said if they were to put it on the market they would place it at around £115,000 (probably hoping to sell it for £110,000 or what we paid).

My partner and I are planning to move to (and rent in) London next month and hope to stay there for the next 3-5 years. I want to train as an actor and the opportunity for this in London is much greater than in Leeds. I am hoping to be a full time student in London in September, however our impending move to London is to make sure I have part time training prospects regardless.

I have been self employed as a small business manager for the past few years; this is not something I wish to do anymore due to my plans to train as an actor. As of mid-April my current part time contract comes to and end. I don't wish to work on a self employed basis after this. If I stay in Leeds living in my flat I will have to seek temporary work; I would rather seek this in London than in Leeds. So technically, as of end-April, I will be unemployed.

Basically, it is essential that we move from Leeds to London by May. We have also found some lovely tennants who are interested in our flat who can move in when we move out. The rental price covers the mortgage interest as well as the service charge we pay to the managing agent who provide communal services and overall buildings insurance.

I don't really wish to sell the property: a) because we would incur fees from the Halifax to get out of our mortgage; b) I don't really want to sell the property as I wish to remain on the property ladder; and c) I wish to have a base in Leeds should we move back.

Before calling Halifax I would like to be aware of what my options and also what I would like to discuss with them. For example, I've read on other posts that they are more flexible if you require the consent 'out of necessity'. If this is the case I would prefer to put forward a strong argument for this due to my work situation, the relocation, me potentially becoming a student, etc... However, I also don't want to put myself in a vulnerable position by sharing with them anything I don't need to (i.e. pushing the fact I am unemployed if it will not work in my favour when I am actually very employable, etc).

If I contact Halifax what will be my options?

Would they offer me a CTL mortgage? Or Would they try to push me towards a BTL mortgage?

If so, what kind of interest rates would I be looking at paying, and what fee would they charge?

Also, on what grounds are they most likely to refuse and how do I prevent this?

Thank you all for your help in advance!!

blckbrd

Can't comment on what the Halifax may decide but do you have consent to let from the freeholder?

s0237276

I recently went through the process of a consent to lease application (successful) with halifax so here's my info:
- they were very understanding about needing consent to lease and no really questions were asked as to why.
- you needed to have at least 25% equity in the property
- consent to lease granted for a maximum of 3 years - although can be reviewed at the end of this.
- they had their own valuation of the property calculated and used this to determine whether there was enough equity in the property.
- they did switch me over to a consent to lease mortgage interest rate, though it wasn't the full buy to let one and think it varied depending on equity in property.
- you needed to be able to achieve 125% of interest payment through rent to cover any extra expenses (though I wasn't asked to prove this).
- you need to be able to show how you will repay the capital part of your mortgage - though equity in property was fine to count towards this for me.
- they were very helpful when I went to sort it out - simply a case of signing paperwork, although that may have been because I was out of current mortgage deal and met all the requirements.

Good luck.

MPlant

There is an 'absent landlord'. Currently there is no freeholder and hasn't been for the last five years; from what I remember the company who collected it went bust and since then it has been hard to trace who owns the lease. We were made aware of this when we purchased, the mortgage company were informed, and were advised to take out Indemnity Insurance.

The flat is within a converted mill that dates back to around 1850; the mill was converted into flats in 1992. When the flat was first converted all 22 flats were let by one owner. Currently 2 owners live in the buildings, the other 20 flats are let out by 13 different owners.

MPlant

I don't have 25% equity in the property; I have around 10-15%. Does this mean they will not let me let out my flat?

s0237276

Possibly not....I was lucky enough to have 50% equity and when chatting to the guy he just mentioned it in passing - said that there are some exceptions to their 25% equity rule like when people are serving in the forces and have to move abroad but that they have ahd to turn down people who don't ahve 25% equity.
If you've only got 10-15% equity then it sounds like you probably won't be granted consent to lease.
Best to call their mortgage people and arrange a meeting to check.
Do you have other options?

MPlant

I was reading on another post that they can't really refuse you if the situation cannot be avoided, i.e. you have no option but to move out.

I reall have no option but to let the property out.

s0237276

A recent post where someone was refused by halifax because of lack of equity. Not sure whether moving because you want to become an actor would count as a 'no option but to move' situation.

http://forums.moneysavingexpert.com/showthread.html?t=2356385

Your best bet is to sit down with a mortgage adviser at your local halifax branch and talk through the possibilities.
Whatever you do do not think about renting the property without consent to lease.
Let us know how it goes.

sammyjammy

MPlant wrote: »

I was reading on another post that they can't really refuse you if the situation cannot be avoided, i.e. you have no option but to move out.

I reall have no option but to let the property out.

I don't think that would be their view, they hold in the cards I'm afraid, there is a big thread on Halifax consent to let (or not). If you do a search I'm sure it will come up or some kind soul less lazy than me will provide you a link

MPlant

I've read the other threads and am still none the wiser.

The fact that I want to be an actor is not something I would share with my mortgage lender as the 'reason' why I have no option to move, I was sharing this with the board to shed light on my situation.

The situation I would share with my mortgage lender would be the fact that I am self employed and as of mid-April will be unemployed. I do not have secured income and I have no more self employed contracts in the pipeline. There have been cut backs in my line of work and I will be folding my business. If I wasn't moving to London I would be considering moving back home to my Mum's. This is actually the truth... The fact I want to move to London is a fresh start to what would be a less than ideal situation if I wanted to stay in Leeds.

I am very unhappy living in Leeds, so much so that since moving into my flat I have felt unsatisfied with every aspect of my life. Thinking back now I wish I had never bought the flat as I would prefer to be without the burden and be free to pursue the things I wish to pursue (with my £10k deposit and £5k development funds in my pocket). Perhaps in other people's eyes this may not seem like a 'no other option' situation but that is the case in my eyes. I know there are people in much less preferable and unbearable situations than my own, however I don't want to compromise the things I wish to pursue in life and end up becoming depressed in the process.

Can anyone shed any more light on the what would be deemed as a 'out of necessity' situation by Halifax?

VIGILANT22

Each application is individually assessed..the branch takes the details and passes to central underwriting for a decision.