Extortionate Charge To Allow Letting

firebadger

Here's my situation and I'd love some feedback as to whether this is reasonable or not and what I should do next.

I have a property with a flexible mortgage from Santander which we moved out of last year to a new house that is essentially paid for (an inheritance). After moving out we put the house on the market but after a year it still hasn't shifted and is still sitting empty like a concrete albatross round our necks.

We are now considering letting to try to stop the haemorrhage of cash and we queried Santander about whether we could let under our current mortgage and they've now responded by letter with a proposal that we pay them a one-off non-refundable charge of 1% of the original mortgage amount (well over a £1000) to allow this. Does this seem at all reasonable?

opinions4u

A let property is higher risk, harder to repossess and statistically more likely to go in to arrears.

How much would it cost to switch to a buy to let deal?

dunstonh

Extortionate Charge To Allow Letting

You havent mentioned any extortionate charge. What is it?

they've now responded by letter with a proposal that we pay them a one-off non-refundable charge of 1% of the original mortgage amount (well over a £1000) to allow this. Does this seem at all reasonable?

Thats very reasonable. Many lenders up the interest rate by 1% p.a. So a one off charge makes sense.

Remember that the charge is tax deductible.

firebadger

It is interesting to see that my first reaction isn't shared and I'm beginning to breathe a bit more easily and my blood pressure is returning to a safe level. I guess I'm just a bit jaded by the amount of money I've had to spend in relation to that property recently.

Thanks for the feedback.

Ms_Sophia

£1k only? last time i checked BTL mortgages arrangement fees only were a few grands... and the % rates are 1-3% higher than for residential mortgages. So your one-off sounds like nothing

Trollfever

but after a year it still hasn't shifted and is still sitting empty like a concrete albatross round our necks.

Reduce the asking price.

JQ.

Trollfever wrote: »

Reduce the asking price.

^^^^^ This

You consider an empty property is an albatross round your neck, wait until you're a professional landlord and all the responsibility that entails.

firebadger

I have reduced the asking price however the market seems to indicate not enough. The way I see it I have two options - rent it out and hold tight for the market to improve or reduce the asking price and make a big loss on the property but at least get it off my hands and not risk further devaluation.

poppy10_2

firebadger wrote: »

I have two options - rent it out and hold tight for the market to improve

When will that be?

or reduce the asking price and make a big loss on the property

You own another property that is mortgage-free, you're not going to come out of this deal making an overall loss