Renting out property

El_Guardo

Hi all, I'm hoping some of you will be able to offer some guidance on this one...

My girlfriend purchased her house in May last year on an 80% 5 year fixed rate mortgage with the Leeds. Whilst fixing for as long as possible seemed a very sensible thing to do at the time, we are now kicking ourselves as we didn't consider the possibility of moving in together at some time in the future...

We are now discussing moving in together at my house (which is the only feasible option as it is larger than hers), and thinking about the possibility of renting out her house. It's a newly refurbished two bedroom house in a nice part of Nottingham and would comfortably obtain more in rent than she is currently paying on the repayment mortgage.

Would we need to convert her mortgage into a buy-to-let in order to do this (along with all the early redemption/arrangement fees etc, and the likelihood of needing a maximum 70% LTV), or is it just a matter of getting some form of legal consent from the mortgage company to let out the house?

We wouldn't be intending to put her on my mortgage yet, and we can both afford to run our houses independently at the moment. Are the mortgage company likely to have a problem with any of this? If they would insist on a buy-to-let, could we use the rent-a-room scheme to get around it?

Thanks in anticipation

Wh05apk

Speak to Leeds, you need "permission" or "consent" to let, basically they just say "yes thats ok" will probably cost you £50-£100, and they will probably want to know why you are renting and likely source of tenants - i.e. DSS or professionals (suggest you might want to get professionals!), but you will be above board, they will let you retain the existing deal, until it finishes, probably then putting you on their SVR.

somethingcorporate

Wh05apk wrote: »

Speak to Leeds, you need "permission" or "consent" to let, basically they just say "yes thats ok" will probably cost you £50-£100, and they will probably want to know why you are renting and likely source of tenants - i.e. DSS or professionals (suggest you might want to get professionals!), but you will be above board, they will let you retain the existing deal, until it finishes, probably then putting you on their SVR.

Depending on the lender you may need to renew consent after a certain period of time. Ours with the Bank of Ireland lasts 2 years (of our 5 year fixed residential) before the C2L needs to be renewed.

getmore4less

Once the lender agrees, then look at the insurance and then all the other things you need in place before and during letting .

Also understand the tax implications, both income and CGT


rent a room is a little dodgy since it is for main home only, but she can still "live" there as her main residence and stay at yours sometimes(a lot).

Accountant_Kerry

I had a mortgage with leeds, they charged me £90 for consent to let, plus an additional 1% onto my interest rate.

However I was at about 100% LTV and they did switch me to a BTL fixed for 5 yrs at less than the consent to let rate, there was a fee of apporx £1k though for this.