Permission to let help please -is this fair

chinchilla99

£2,500 every 6 months for permission to let...is this fair?

After having my house on the market for nearly a year, I'm currently unable to sell my house - like lots of people. I have lowered the price as much as I can but can't lower it any more without being in negative equity. The plan is to move in with my boyfriend so i don't need another mortgage or anything.

So I've come to the conclusion that I'll have to rent it out even though i would much rather sell.

After studying the forums here, I rang my lender (St James Place bank) to ask for a 'permission to let' They say i have to ask for permission in writing and i should bear in mind that they won't necessarily grant me this permission and even if they do they will charge me the princely sum of £2,500 every 6 months i want to rent it out.

Is this fair? I don't know if i can even afford to pay that. My other half is advising not telling lender & renting it out. He has done that in the past.

Any advise please? Has anyone been in this situation and found a way through?

thanks in advance....

Mallotum_X

Ouch

How much more would you have to drop to get a sale?

Nikel

chinchilla99 wrote: »

My other half is advising not telling lender & renting it out.

I wonder how many people do this,and what the chances are of being caught out. Check this thread before considering that.
https://forums.moneysavingexpert.com/discussion/1377883

anselld

The alternative is to remortgage with a BTL mortgage. This may or may not be cheaper depending on what rate you are on and how long you expect to be renting for.

It is highly risky not to tell your lender.

G_M

The loan you took out was for a residential mortgage, and the lender agreed on that basis. Lending on a property that is rented out is much riskier. So yes, it is hard for you, but fair. You are changing the terms of the contract under which you borrowed so the lender is entitled to agree, refuse to agree, or agree subject to a charge.

Granted this bank appears to want to charge more than many banks would, but this might reflect your personal circumstances, the LTV, or simple their reluctance to get involved in non domestic mortgage business.

If you do NOT get permission, you will be in breach of your mortgage contract and the property could be repossessed. Provided you always pay the mortgage on time, and you have good tenants who do not alert the bank, you may well get away with this, but there are no guarantees with anything when letting.

chinchilla99

thanks guys - for the replies

Mallotum X - thats a good question that i don't know the answer to! there are hardly any people looking to buy round here (cheam, surrey) i reckon if i dropped another £50k off the price it would go but then i'd have £50k of negative equity

i 've looked on the permission to let thread here and know the legal position that i should get permission to let but this seems an extortionate price for the lender to charge. is there anything i can do to appeal to a more usual level or so i just accept my fate and take a risk.

i just want to move on

Incyder

Move your boyfriend in with you at your house and rent his house out.

chinchilla99

thanks incyder - we would if we could but that option has been ruled out !

Incyder

ok, how many bedrooms has your house got ?

chinchilla99

3 bedrooms - 2 have beds in them and one's an 'office' type set up but that can always be changed

westlondonbuyer

How many bedrooms do you have in the house you want to rent out?

You could possibly rent out every bedroom bar one, and call yourself a residential landlord, so your tenants would be lodgers instead.

There is no minimum occupation period to qualify as a residential landlord - you could spend one night a month there - provided you're listed on the council tax and the electoral register as resident at that address.

You still have to tell your mortgage company about this, but as it doesn't substantially increase the 'risk' element (lodgers have almost no protected rights) they are unlikely to charge you.

There are problems with this option, of course, but they mostly concern the practicalities of living with people you don't know (even if it is only for one or two nights once in a while).