Lettings Interest 1.5% Martin HELP !

Headancer

Well thanks Nationwide I have just been potentially clobbered with an ADDITIONAL 1.5% mortgage interest rent/lettings levy !

Has anybody esle fell foul of this this week ?

I wanted to rent my residential property out as I cannot sell, I asked verbally if this was ok earlier this year and they said yes, could even do it in advance and fill forms in later. Did all that in Sep, and found a good decent tenent with no baggage.

I then found they lost forms so re submitted, however I have now had a letter from them saying old forms are no longer valid....u can see why!

I rec'd new forms with a letter !

Nationwide have imposed an additional 1.5% letting fee on top of normal morgage rate across all customers, OK this kicks in after 6 months but I am well into that with new tenents, who have only just carpeted and redecorated.

Did they lose my form deliberatly ?

Would I still have been liable for this anyway if I already had a contract in place.

I am outraged this will more than double my current 1.5% mortgage to 3% and makes renting out a complete farce !

I am stuck !

I am not in the habit of lawbreaking but I am balistic, after 12 months unemployement I have just about got back on my feet and now this !

If I dont actually tell them where does that leave me? They only say that my building insurance would be invalid but that is with a different company, as long as they are being paid how would that invalidate the insurance ?

I have buildings insurance thru Simple Landlord Insurance, is that still valid if I dont tell the mortgage company its rented , I suspect I will tell Nationwide but so tempted not to tell them I am so angry at this !

G_M

Pretty normal. Many (most?) providers charge more in interest on rentals. It's part of the business (yes, renting is a business, with income, tax to pay etc).

Since you've got tenants willing to pay for their own decorating and carpetting I'd say you're pretty lucky!

Yes your landlord insurance is separate from your mortgage, so still valid (unless there is a specific clause in your insurace policy saying it is conditional on mortgage approval - unlikely but check.)

However, letting your property without the lenders agreement would put you in breach of your mortgage agreement - a legally binding contract with your property being the collateral!. The Nationwide could choose to impose penalties or cancel your mortgage. It also puts your tenants at risk and is unfair on them as their tenancy agreement with you becomes invalid since you don't have the right to grant such a tenancy.

Caroline_a

3% still seems pretty low to me. It's certainly lower than anything else I've seen.

G_M

Caroline_a wrote: »

3% still seems pretty low to me. It's certainly lower than anything else I've seen.

Yeah - a quich search on Moneyfacts shows buy to let mortgages starting at 4.1% (Bank of China) upwards.

poppysarah

Headancer wrote: »

Well thanks Nationwide I have just been potentially clobbered with an ADDITIONAL 1.5% mortgage interest rent/lettings levy !

And?

Move your mortgage and see what someone else would charge you.

Being a landlord is a proper business not just messing about.

seraphina

Did you actually consider what was involved in renting out a property?

And this site is for CONSUMER advice - as a landlord, you're now running a business. Can't see Martin being that interested TBH.

You might think you can't afford to take the finiancial hit for selling your property at it's current value, but it appears that you can't afford to rent it out either...

GavB79

If this kind of thing sends you ballistic it doesn't look good for the long term. 3% is a FANTASTIC rate for a BTL mortgage.

Tiddlywinks

Your motgage company now knows that you are renting out your property so it would look pretty odd if you suddenly told them you weren't - I'd imagine they'd want to check this out for themselves.

As a LL you have to accept that you have entered into a business transaction with your tenants - you need to act like a professional and research, understand and accept the responsibilities, costs and risks involved.

Have you got a contingency fund for emergency repairs etc? What if the boiler goes, plumbing fails, electrics blow? If you can't afford these things and have no way of paying for them then you shouldn't take on tenants.

antrobus

Headancer wrote: »

Well thanks Nationwide I have just been potentially clobbered with an ADDITIONAL 1.5% mortgage interest rent/lettings levy !

Has anybody esle fell foul of this this week ?

Nationwide made this change months ago. (May 2010 I think.) So the position hasn't changed since you 'filled out the forms' in September.

G_M

I also like the OP's thread title "Martin HELP "

A Is this in expectation that Martin is constantly monitoring the forum?
B And does the expectation go as far as hoping Martin will start a consumer campaign against Nationwide?

bris

Your lucky they are not making you switch to a BTL mortgage, some will do that and the rate is almost double. 3% is a steal, if you cant pay the mortgage with that rate then you need to stick the rent up or try and sell again.