Moving in together... now have two mortgages!

Oneday77

It's not 'social' housing reserved for teachers and alike, its part buy, there are 2/6 flats in the building which have been staircased up to 100% and are rented out to i'm sure we would be allowed to do the same as there is already precedent.

The let flats in the same building, do they actually have permission to rent?
Without you reading the agreements with the parties involved you don't have a leg to stand on.

Even if they are not reserved for Teachers etc, they are still not there for people to start on the ladder and then keep it to themselve to profit from. Thats why social housing of any form isn't for subletting. Furthermore was there not talk of a clamp down on subletting and making it a criminal offence. I may be out of context but it was in the news a few weeks ago.

If the property wasn't part own\rent would your wife have made it onto the property ladder in the first place?

hazyjo

Werdnal wrote: »

But it is on the rental market as you are renting it to your SIL, and you are already breaching the terms of the part buy/part rent deal as you are subletting!

You are infact a LL, with all the legal obligations that entails. I hope you have a Gas safety certificate, that you have advised your mortgage that you are no longer living there, and your insurance has changed to a LL based policy. I hope you are declaring the income for tax.

Sorry I know that is not what you want to hear, but it is fact and time to sell it asap before the rental arrangement you have comes back to bite you!

hen12y wrote: »

-in fact we are probably in breach of something just letting it at cost to her sister.

I'm aware of that, technically she is the LL not me, and as it is at cost there is no profit to declare, and as we're in tax year Apr12-Apr13 it would not have to be declared untill Jan 14 so is not of too much concern yet anyways.

'Profit'/tax declaration is only a very small part of being a LL. You might want to reread Werdnal's post above. Your OH needs to be doing a whole lot more than just worrying about tax...

Plus you'll probably find the insurance is no longer worth the paper it's written on...

This is a massive gamble. I agree with those saying they'd sell. I'd definitely get rid. Sorry if that means her sister has to go pay the market rate somewhere, but I'm sure she'd not want to stay there if she knew the huge risk her sister was taking. Penalties can be severe.

Jx

pinkshoes

So what are you hoping for in 2 to 3 years time? Do you anticipate it going up in value?

Personally I'd just sell, and move on. There is far more to life than money.

How much do you earn, and how much is your current mortgage? (i.e. do you know 100% that you can't raise the extra money?).

Yorkie1

On the tax point, I think you'll find we're in tax year April 2011-2012 at present, not April 2012-13 as you stated, OP ...

sonastin

Is your wife on a repayment mortgage? Does "at cost" mean the sister is paying all of the mortgage payment or just the interest portion? The repayment part of the mortgage can't be off-set against the rental income so there would be tax to pay on the repayment bit if that is the case.

You've already had pointers as to the other obligations of being a LL. You can continue in this informal, under-the-table agreement with her sister without knowing your responsibilities if you like but if you're thinking of going down the open-market rental route anyway, you might as well start reading up on what it takes to be a LL now. Landlords can and do get prosecuted, fined, imprisoned for breaking LL&T law. Don't risk it.

Oh, and 71mph on the motorway is not a grey area of law. It is black-and-white against the law. The grey area comes into whether the police, CPS and courts have the time & budget to prosecute but it doesn't make the act itself in any way legal.