Crazy Halifax 'consent to lease' rates - please help!

kingstreet

mindthegap9940 wrote: »

Can anyone help? . . .
My partner has a new (more secure) job which will be located in the south west of the country for one year (then probably back to London). We currently own a property in London and have our mortgage with the Halifax. We will need to rent the house out to cover our costs down south. I've just called them to request a Consent to Lease and they informed me that we will have the change from our current rate of 3.5% to either 5.89% tracker with a £599 fee or 5.69% fixed with a £1499 fee! We also have to ensure an agent manages the property (which we were going to do anyway but this does adds £70 p/month) and there are various conditions re who can /cannot live in the house. Just done a quick calculation and this could cost us an extra £600 per month (we have a big mortgage!) This could cripple us once we factor in other moving costs and costs associated with renting out (safety checks, storage etc). I am due to resign from my job next week, my husband starts his job in mid-Feb. Can't think of a way round this and am beginning to panic. We would need to pay a heft early repayment charge if we moved to buy to let elsewhere. I can only think my husband will have to go down south alone for the year and commute back for weekends but I'll be stuck working in London with a baby and toddler. Feel livid the Halifax are making life so difficult for those who aren't going to make any money from renting out property but just need to move in order to gain some job security. Does anyone have any suggestions? Many thanks

Are you on standard rate? Thought about doing a product transfer? Halifax don't impose the CTL deals on those already on another deal.

mindthegap9940

KingStreet - presumably this wouldn't be possible now I've made the enquiry though? They've probably made a note on our records that we've made the enquiry.

kingstreet

It would certainly have helped if you'd known beforehand and got the product transfer out of the way first. Not much we can do about that now.

Still, if you don't ask, you'll never know. See what they have for your loan to value and desired option (fixed, tracker) as you'll probably find you get a shorter option at a better rate and with a lower, or no, fee.

sonastin

Have you fully thought through the implications of becoming landlords? If this is a one-year posting, I assume you'll be coming back to London at the end of it. What if your tenants aren't ready to move out on the date you're wanting to move back? In order to evict legally, you have to go through a number of steps and to ensure the property is empty on a particular date, you'll need to start the process about 3 months beforehand. But if your tenants co-operate and leave on time, you'll be out 3 months rent. If your finances are so tight that you can't afford a 3 month gap, you'll have to take the risk and hope the tenants do leave when you hope... but you'll need a plan B in case they don't. Unless there is flexibility in the job which means he can move back at any time after the end of the year?

And what if the tenants leave the place in an uninhabitable state? Sure you can insure against the costs of putting it right but do you have the time and emotional strength to get it all fixed up before you move back with 2 young children?

Do you have reserves to pay for urgent repairs? As owner-occupiers, you might tolerate something not being fixed until you can afford to pay for it. As landlords, you don't have that choice - it must be fixed in a reasonable timescale so you need the funds to cover those potential costs. And be prepared for the tenants "harrassing" you until such time as it is fixed - they have every right to be demanding the repairs are done.

These are some of the other elements that you need to factor into your decision to go down this route. It isn't just a matter of whether the sums add up. You're making some significant parts of your life dependent on the actions of others and you need to make sure that you are prepared if those people don't behave in the way which is convenient for you.

I don't have a problem with people choosing to follow the accidental landlord path if it makes sense for your personal circumstances but I certainly advocate doing the research to ensure you know what could potentially go wrong.

Yorkie1

BitterAndTwisted wrote: »

There is a thread or link on here giving advice to prospective landlords somewhere (GM? maybe it's in that thread linked to earlier) so I'll see if I can find it for you.

Here you are:
http://forums.moneysavingexpert.com/showpost.php?p=41160642&postcount=12

new_home_owner_3

loads of people rent their houses out with consent to let, ive said it before and ill say it again no one will ever get their house reposessed soley for not getting consent to let. If there is any case please show us? instead of scaremongering

ive seen things when landlord have not had all the right insurances or gas certificates but thats the landlords choice and they should ensure they are all in place, even landlord with btl mortgages dont all have these.

The banks are just being greedy, and the only time they will reposess is when you miss mortgage payments.

I got consent to let on mine and they tried to wriggle out of it and charge more luckily i had all the terms and conditions when i took out the mortgage and they had to give it me, after a few letters of complaint.

HARSA

Can I ask how big your property is? You can always keep one of the rooms and take on lodger(s) for the other(s). That way it is still your primary residence and the whole family can have nice weekends down in London occasionally.

Will also give you a chance to spend the odd weekends with your southern friends and families.

A year is not long and you guys will be back before you know it.

And I think there should be some consistences among banks. Whilst some banks give consent with no or very miminal charge others are just too greedy.

If I was in your shoes I wouldn't even tell the damn fools that I was going to let my property whilst I am away for just a year.

PS Goodluck and don't panic much. These things have a way of working okay in the end and beside you have too much on your plate as it is - moving your whole family to a new place and giving up your job.

brit1234

new_home_owner wrote: »

loads of people rent their houses out with consent to let, ive said it before and ill say it again no one will ever get their house reposessed soley for not getting consent to let.

No I am not aware of repossessions. However I am aware of plenty of arrests, prison time and big fines. Police are more and more going down this route. Often people have to sell their properties afterwards anyway.

If you follow new home owners advice you are committing fraud by miss representation, a criminal offence.

On top of that if your flat got burnt down or trashed you could also be exposed and lose a lot.

Always do the right thing.

mindthegap9940

Thanks for the link and advice re becoming a landlord. I rented a property out many years ago when life seemed so much simpler. Oh, how things have changed!

Harsa - thanks so much for your thoughtful post. A really interesting idea re lodgers. The house is big enough for us to hang on to one room and I might even be able to do some ad hoc work in London if we were to remain in the house part of the time. Also agree re consistency across providers. That's what's so frustrating - I know friends who have done what we propose to do and have had a to pay a few hundred pounds as a one off fee at most.

I've spotted some buy to let deals that although not quite as good as our current mortgage rate are still cheaper than the extortionate rates Halifax are proposing for a consent to lease, so it seem like a no-brainer. I'll do some ringing around tomorrow.

HARSA

Ignore Brit1234... he is full of !!!!! and he is a rookie police officer. Knows shte about the law and certainly nothing aout the housing market. He predicted a houising crash in 2009 whereby houses will cost 50% less.

Arrest & prison time for not informing your mortgage provider that you have rented your own property for just a year. Police are going down that route!!!! because they have failed to deliver real policing whcih is all about making our streets safer.

Don't pay halifax penny more than you have to and certainly don't sell your home. Look into the lodger option as you maybe lucky enough to get some good ones