Shared Equity & Sub-letting

jdmwoods

I purchased a city centre 80% Shared Equity leasehold flat approximately 4 years ago whilst studying towards my postgraduate career. Years later, I have unfortunately undergone a change in circumstance and am having to move away from the city. I have consistently paid on time and have never over-stretched myself financially however, will need to rent another property in another city in the short to long term for work.

I have currently got, despite the falling market in city centre flats, 65% LTV but as we all know, a flat is only worth what someone will pay. There is no movement in the market in my city and I am reluctantly coming to the conclusion that renting out may be an option, employing an agent to oversee day-to-day management of the property and to ensure fairness to an eventual tenant.

My questions relate to the best move from hereon in; I have the agreement from the owner of the additional 20% equity of the property for me to sublet the flat and an agreement in principle with the Halifax to swap my current mortgage to a consent-to-lease product. Is this the best option or would I be better to remortgage to a more competitive buy-to-let product in order to save money towards fallow periods in the rental of the property?

If I go with the Halifax product, I will make a loss each month if I include the cost of the mortgage and the service charge as they have admitted to not usually allowing those swapping to change to a longer term repayment solution that would lower costs. (My current repayment mortgage has 14 years remaining)

Are there mortgage providers that would provide a repayment buy-to-let mortgage on a shared equity property (the leasehold allows a mortgage company to gain the 100% share if necessary at a discount to market value) or am I best to stick with the Halifax and subsidise the property for the foreseeable future?

A little additional background to help – my employer has not changed, just the office from which I must work so have no probationary periods etc. and have never missed repayments so I assume that I have an acceptable credit rating.

Any information about the best mortgage course of action would be helpful to let me decide how next to proceed. Thanks & sorry for the essay…

The_J

No, shared equity is not available on BTL. Consent to let will likely be cheaper.

jdmwoods

Thanks for the reply but what will consent to let be cheaper than? I've been quoted something along the lines of £480/month for consent to let on £50k mortgage which seems high

dimbo61

I take it that this is still a repayment mortgage with only 14 years left.
£480 a month over 14 years works out at over 7% BUT you can offset the interest on the mortgage against rental income.
Are you paying a charge to Halifax each month for consent to let ?]
If you wanted a BTL you need to buy the rest of the flat and have a LTV of 75% plus income of £25K+