Permission to let help please -is this fair

Incyder

Yes, as above, thats what I was getting round to if you had enough rooms, which you do.

Set the smallest bedroom up as your own and rent the other 2 out to lodgers.
You will lose your 25% council tax discount. You may want to inform your house insurance company. You may or may not want to tell your mortgage lender.

By not going down the AST route you are free to come and go and keep order over your own house. If you get any offers to buy it you will be free to conduct those viewings etc, you wouldn't be if it was rented out to AST folk.

westlondonbuyer

You MUST inform your home insurance company - if the house is flooded or burns down, and they don't have your lodgers on their books, you won't be insured.

You may get away with not telling your mortgage lender, but I wouldn't.

chinchilla99

thanks guys - renting 2 rooms out is an option. bit messier than the clean break i was hoping for but definitely a good option. thanks for your helpful practical advice.

zougathefist

£2500 for 6 months permission is absolutely unreasonable - most high street banks charge approx £100 for 12 months or £250 for indefinite permission.

given that your bank is looking to milk £5k per year from you, have you considered switching mortgages, even if there is a fee and a slightly higher rate would this cost more than £5k?

Also once you are letting you should be able to claim tax relief on your interest repayments which could potentially offset any increase from switching.

And you must get permission from the lender, as people have said if you do not you are in breach of your mortgage and they can repossess , plus you will not be covered by any insurance (buildings/contents) if you do not have this permission.
If you do let then you will need to get Landlord's insurance which can be quite a bit more than usual

westlondonbuyer

My guess is that they've given you a totally unreasonable figure in order to be shot of your business. If your mortgage or your 'customer profile' doesn't suit the profitability of their books, they'll be looking for opportunities to offload you. You may well get a better deal elsewhere, especially if you go to a specialist BTL lender.

Prices are holding up fairly well in the SE, so I'm actually very surprised you're looking at £50k negative equity. Will two lodgers cover the mortgage without you incurring losses?

chinchilla99

thanks westlondonbuyer - yes i think they just dont want my business. i'd much rather be selling believe me - just feel a bit like I've ran out of options. its not that i'm getting really low offers and refusing them or anything - i've jsut had hardly any viewings - 6 in a year and i've changed estate agents recently. After them promising me they had about 82 people looking to buy in my postcode and that price range they've given me 2 viewings - one of which was supposed to be saturday but they cancelled.

The lodgers option isn't ideal as it wouldnt cover all bills - i reckon i'd be paying an extra £200-£300 to cover it

Mallotum_X

chinchilla99 wrote: »

The lodgers option isn't ideal as it wouldnt cover all bills - i reckon i'd be paying an extra £200-£300 to cover it

Cheaper than 5k for the rental permission, and it would allow you to keep marketing the house - although you may find it hard to attract Lodgers if they know the house is for sale.

Would the likey rent (less costs etc) be enough to cover the mortgage for now?

50k seems a huge drop to have to consider, but do bear in mind it could be quite some time for prices to recover if you do decide to wait it out.