Consent to Lease

JonnyBravo

dimbo61 wrote: »

Another thing to take into consideration is Capital gains tax ?
If you rent out for more than 3 years you may well have to pay it for any profit you make on the property since you bought it!
BTL mortgages are not regulated by the FSA

No. Not since they bought it. Since they started to rent it out.

Jet8

Thank you to all who have contributed. I pay tax on the rent already and top up mortgage each month. Would capital gains tax apply? Thought this was only if you made £10,000 per year and then sold...

Jet8

opinions4u wrote: »

There is a difference between arrangement fees and product fees though, and in this case the £1,249 is a product fee.

The FSA is not saying that lenders should charge the same rate and product fee as that would be anti-competitive.

I see. So the Halifax may be able to justify that.

Although I haven't noticed a debt or LTV, comparing the Halifax numbers to a typical BTL deal and you are there or thereabouts.

I'd still sell up in your circumstances.

(Sorry it's not what you'd like to hear)

You have been very helpful. Some people have mentioned capital gains tax - would this apply to me if I sold? or carried on renting and then sold? Am starting to think you may be right about selling...!

Jet8

JonnyBravo wrote: »

No. Not since they bought it. Since they started to rent it out.

Thanks for reply. Really?! Thought capital gains was paid on much larger profits.

luckyfool

CGT is payable on the period since it was let out, subject to the PPR (principle primary residence) loophole. i.e. There is a grace period after moving out where it is still not subject to CGT. Get some proper tax advice on this.

Tax on rent - You should only be paying tax on any excess rent over and above the "Interest" costs on the mortgage + any other letting expenses.

If your ltv is under 75% you should be able to obtain a proper BTL product on better terms than what Halifax are trying to force onto you.

Thrugelmir

Jet8 wrote: »

I am clearly not using this as a money-making scheme, but want to keep the house as my parents live 3 miles away and may wish to live in the house at some point. OR my husband and I may want to move back there.

Is anybody in this position? Can anyone advise. Thank you.

The purpose behind consent to let is to allow people to move to different geographical areas easily. In effect allowing them to own 2 houses on residential mortgages.

On the grounds given above. It could be argued you never had any intention to sell your first house. As after 3 years you still wish to retain ownership.

The fact that rent doesn't cover the mortgage. Is in effect a commercial one. Which is entirely your decision. Has absolutely nothing to do with the Halifax. Who now quite rightly wish either repayment of the debt or move you onto a more approriate product.

Jet8

Hm thanks Thrugelmir. The house I'm renting out is the ONLY house I own though. I have not bought since. Re: the rent - there is a limit to what I can reasonably ask and since the Halifax hiked the rate, I can't reasonably ask tenants to come near it.

TrickyDicky

Why dont you try selling? Not owning a this house will probably be more profitable than owning it.

Jet8

I suppose I hoped that the house would eventually prove to be an investment and I could sell it then... also a way of remaining on housing ladder - even if I don't live in it!

mynameisdave

Jet8 wrote: »

according to the FSA, fees charged are supposed to be comparable with other lenders; the Halifax are way more expensive than anyone else.

Um, not for buy to let they are not! If there is a mass of sub £1,000 fee BTL mortgages available I'd like to know about them as I can now remortagge my BTL penalty free.

Mortgage Works seem to have a standard 3.5% fee.