Can I rent out a flat on a shared equity scheme?

superkittie

Hi Everyone,

I currently have a new build flat from Barratt's (bought 3 years ago) and they own 25% I own 75% I have 10 years to pay the 25% back.

I am looking to rent out the property ASAP can anyone tell me if this is allowed? I know I will have to tell my mortgage lender, get insurance etc.

Thanks

PasturesNew

Usually the answer is "no".... you need to get a copy of YOUR actual lease and agreements and read the wording that's actually in yours. Every scheme, company, organisation, area, etc, will all have different conditions/terms. But, the likely outcome is "no".

kingstreet

If it's shared equity, rather than shared ownership, there's a better chance of subletting being allowed in the lease.

Are you sure the ownership is as you say? Builders normally go the shared equity route. You own 100% but they take a second charge over the property for the equity loan of say, 25%. If it was shared ownership you wouldn't "have ten years to pay it back" as they would own their share until you decided to purchase it from them.

As PasturesNew says, the only way to find out is to read your own lease. Anything else is pure speculation.

superkittie

Thank you PasturesNew & Kingstreet

I have checked now and it refers to the 25% as a loan and states I need written consent from the build before I let or part let.

Have you had experience of this? What are the chances of them saying yes?

Thanks

kingstreet

No idea of your chances of success. I guess there'll be a fee involved though!

Post back and let us know how you get on as there are bound to be others with similar questions in future - shared equity schemes are likely to become more topical as the years go by, particularly those run by Barratts, Wimpey etc.

martinsurrey

I know other developers consider each request on its merits, its best to be honest with them as to the reason.

You may find the mortgage company is a lot more trouble!

Werdnal

Are you awar eof all the other costs and legal obligations of becoming a Landlord - H&S, Insurance, deposit protection, income tax?

Best sit down with a coffee and have a read of this:

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

before you go any further!

If you do not understand any of the info, or anything in the links it contains, come back and ask again.

In letting a property, you are allowing a complete stranger to have sole possession of the most valuable asset you will ever own. Do it correctly, legally and well and it can work out OK. Do it wrong, cut corners and ignore the rules and laws and it can come back to bite you big time!