Advice needed on Letting out property

abankerbutnotafatcat

I advised my lender, NatWest (also state-owned), that I was letting out my property a few months ago. They charged me a one-off fee (£300 I believe) to note this but didn't alter the interest rate. The only difference it has made is to the LTV available to me when I remortgage is a bit less. Perhaps I was lucky. Unfortunately, if you are not in a position to remortgage then I think you are stuck with Halifax's BTL higher interest rate. Good luck OP.

abankerbutnotafatcat

@492800: in some guise for around 8 years and it was financing a 1997 purchase so has always had a sub 80% LTV which perhaps makes a difference to the bank's risk assessment.

junglejim2

I know of quite a few people who are renting without lenders consent.
I never heard of anyone being caught for doing so. Does anyone out there know of anyone who has been caught, and what happenend in reality.
I imagine as long as lenders get their monthly payments then everyone will be happy.

neverdespairgirl

There's a case on the mortgage board here on MSE right now.

martindow

jendav wrote: »

My point is that house prices always go up, along with everything else. House prices today or 4 years ago are higher than 1990, 1976, 1950, etc. You have to bear the fact that prices will always rise and buy when you can.

Yes, but prices do not go up steadily and getting on the house buying ladder at a peak can be disastrous.

http://www.housepricecrash.co.uk/graphs-average-house-price.php

Someone who bought at the peak in 1989 had to wait until 2001 for the price to return to that level. Negative equity can trap you in a house for years and cause financial disaster if you are forced to sell.

bigsooze

I am interested in the OPs question as we are in the same position, and not through any naivety or careless planning on our part. We are in a 2-bed flat, and would like more space for a growing family. The sales market for our type of property in our area is extremely slow (even priced competitively) whereas the rental market is bouyant, so we have decided to rent out our flat, and rent a bigger property for a while. This will also allow us to test out areas for our next move before we take the plunge and buy again.

We're also with Halifax and they've offered us a consent to lease deal - we are lucky enough to have 25% equity in our flat so this isn't a problem. However their rates mean they expect a rental income at the very highest end of what we could hope to achieve (probably slightly over if I'm honest). We have enough income and savings to cover any shortfall easily from my partner's salary alone, even taking into account our other outgoings and me going on maternity leave. So like the OP, I don't know how stringent Halifax are on the criteria that your rental income needs to cover your mortgage payments - if they're strict on it then this could be a stumbling block for us, even though we are not actually relying on the rental income to pay the mortgage in any way.

camptownraces

bigsooze wrote: »

We have enough income and savings to cover any shortfall easily from my partner's salary alone, even taking into account our other outgoings and me going on maternity leave. So like the OP, I don't know how stringent Halifax are on the criteria that your rental income needs to cover your mortgage payments - if they're strict on it then this could be a stumbling block for us, even though we are not actually relying on the rental income to pay the mortgage in any way.

Don't forget that in your calculations you need to factor in repairs, voids, non-paying tenants, costs of letting using an agent (or training for yourself if you are planning to do it yourself). All this could bring down the net rental income quite significantly.