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Advice needed on Letting out property

mconnolly81
Posts: 10 Forumite
Hello all,
My situation is simple - i cannot sell my apartment for love nor money, and as we are almost at a point where we have enough savings for a deposit on another home, i am looking to rent the apartment out.
My quandry however is simple - My mortgage is roughly £550 p/m, however when i asked the Halifax for consent to let, they want to significantly increase the interest rates which will hike my repayments over the £600 mark which will price me out of the rental market.
Has anyone out there had similar experiences and knows of any workarounds/loopholes or can simply give me some advise on ways of reducing my repayments.
I've already enquired about switching to an interest only mortgage, only to have the door slammed shut in my face due to the lack of equity on the flat.
Thanks
My situation is simple - i cannot sell my apartment for love nor money, and as we are almost at a point where we have enough savings for a deposit on another home, i am looking to rent the apartment out.
My quandry however is simple - My mortgage is roughly £550 p/m, however when i asked the Halifax for consent to let, they want to significantly increase the interest rates which will hike my repayments over the £600 mark which will price me out of the rental market.
Has anyone out there had similar experiences and knows of any workarounds/loopholes or can simply give me some advise on ways of reducing my repayments.
I've already enquired about switching to an interest only mortgage, only to have the door slammed shut in my face due to the lack of equity on the flat.
Thanks
0
Comments
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put bluntly:
you cannot sell because you are not prepared to price it realistically as that, it appears, would put you in negative equity - therefore you now want to become an accidental landlord who has committed mortgage fraud by letting without consent which would also invalidate your insurance policy (even if you get a LL policy)
or you can re-mortgage - there are no other legal loopholes0 -
put bluntly:
you cannot sell because you are not prepared to price it realistically as that, it appears, would put you in negative equity - therefore you now want to become an accidental landlord who has committed mortgage fraud by letting without consent which would also invalidate your insurance policy (even if you get a LL policy)
or you can re-mortgage - there are no other legal loopholes
Dont pull any punches pal!
I wasnt looking for a way of beating the system or masterminding the 'fraud' of the century. Merely looking for guidance on what options i may have with other lenders or mortgage products maybe. maybe there is something out there to help a novice in this field.
obviously i have come to the wrong place.0 -
I suspect the reason you can't find a buyer for this property is because it's not priced realistically. Drop the price and use your savings to cover any negative equity if you have to. Or sit tight and pay down the mortgage until you can sell.0
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they want to significantly increase the interest rates
This reflects the greater risk that the partly taxpayer owned Halifax has to bear.0 -
This is my reply to someone asking for similar advice in another thread:
I have been in your exact situation. Almost 3 years ago, I put my house on the market but was unable to sell. Stubbornly (and, with hindsight, stupidly) I didn't drop the price low enough, so rented it out instead. A simple and easy solution (or so I thought).
I moved out of the area and an agent took care of my rental property. In moved a couple who, in the last two years, have run up a lot of debt with utility companies, credit card companies (several CCJ letters arrive daily). They vacated my property recently (thank God!) leaving me with rent arrears and have left the place in a mess and have moved on without leaving any contact details. I'm now trying to retrieve their deposit (which doesn't anywhere near cover what they owe me) and I'm even having to spend further money getting my claim for the deposit witnessed by a solicitor (admittedly, this is only £5 - a drop in the ocean - but every bit adds up).
I'm now going to completely redecorate from top to bottom and will do everything I can to get the damn place sold.
I'm sure it works for lots of people, and lots of landlords (and tenants) have great experiences of renting. However, if it's a temporary solution rather than a business (as it sounds like yours is), I would avoid like the plague. As others have pointed out above, there are SO many things to consider that you just don't even think about before going into it.
Yes, you realise you have to pay and submit tax returns on your profit; yes, you realise you're liable for gas checks, maintenance, etc and you keep a contingency fund "just in case"; yes, you realise that you have to have landlords insurance; yes, you realise that the place may be worth less when your tenant leaves and you're left with a big cleaning bill. The list of what you're letting yourself in for goes on and on.....
But what if your tenant doesn't pay their rent? What if he/she DOESN'T leave when issued with notice? Before you know it, your expenses have run into thousands.
Dropping the price to sell your house doesn't seem like a bad idea now does it?0 -
are you tied in to your current mortgage? if not, look to get your mortgage on to a buy to let product and you can let it out to your hears content. We're accidental landlords and have consent to let out our property until the end of our fixed rate deal. after this we're moving it straight onto a buy to let mortgage as it deals with insurance issues etc. may not be the cheapest but when we looked at buy to let products a few months ago they were certainly competitive with normal residential mortgages.0
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I'm in a similar position, though house not on the market. Had been thinking of putting it on until I got realistic guide prices from estate agents. I'm personally just going to wait it out for acouple of years and hope I don't lose more money in doing so.. By then maybe I can break even. In the meantime I'm saving another deposit up.
I looked at renting it out too but the money coming in wouldn't be enough to cover the mortgage let alone the rates and tax return.
It's not something you want to hear, but sounds like you either utilise that deposit pot to sell your current house and clear the negative equity or you sit tight for a while..
00ec25your comment is brash and it is clear the OP has no intentions of 'pulling a fast one'. Your comment is useless as it doesn't offer advice, or empathy, it just assumes the worst of the OP.0 -
Cheers guys, yes, the asking price can be reduced but it will then go into negative equity.
essentially i'm desperate to get out this shoe-box of a flat and get a house, but looking around these forums there are people in far worse positions than me.
Maybe i was hoping for a miracle solution!
I guess its just a case of grin and bear it!0 -
00ec25your comment is brash and it is clear the OP has no intentions of 'pulling a fast one'. .
Yes it is brash, there is nothing "clear" about the OP at all, he is looking for "loopholes" on a topic that features on here weekly towhit: I am an accidential LL, I do not know what I am doing, but I want to bend this rule I have just been made aware of.
Letting without consent has reprecussions for all, particularly the unfortunate tenant if it comes to repossession. Therefore I chose to nip this in the bud using plain terms as have been posted many times on previous similar threadsYour comment is useless as it doesn't offer advice
errr... so what's this mean then? "...or you can re-mortgage. There are no other legal loopholes"0 -
People (not targeting you specifically OOec25) on these forums are getting an inflated sense of ego with their replies and not considering that the person who is posting a question is either new or has not read similar threads to find the answer they are looking for.
Being an accidental landlord is an effect from this downturn in economy and those who are in this position perhaps haven't done all the research on the subject as a 'on purpose' landlord had to do before letting.
In my opinion, which probably means nothing to you, the other poster just wanted to know if there were other options they weren't aware of because of their limited experience and exposure to letting.0
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