Getting permission to sublet from mortgage company - possible?

DaliahGreen

Hi there,

I have a shared ownership property. It's in negative equity to the tune of 20K.

I had to move away at short notice, so I've had permission from the Housing Association to let it out as I can't sell it, even at a significant loss. They agreed straight away and were really quite nice about it.

I now have a tenant in, and it's just about covering my mortgage. I really need to get permission from the mortgage company for obvious reasons, but I'm a bit nervous about contacting them in case they say no.

Does anyone have experience of this, and are they likely to agree to it if I ask them nicely about subletting? I've been on time with my mortgage payments and have never caused them any problems.

Daliah

holly_hobby

As it stands, you are currently in breach of your mge t&cs and your buildings ins - which means that you may face an order to sell and added penalties if they discover the unofficial let, with no ins cover if the property is damaged etc whilst let.

You need to advise your lender - lets hope they agree seeing as you already have a tenant in ...

You need to effect landlords buildings (and contents if you can afford).

You need to delcare rental income to HMRC for income tax purposes (via annual self assessment)

If you sell within 3 yrs of vacating you will avoid CGT liability - after this period any gain will be assessed, being offset by appropriate reliefs and annual unused personal CGT allowance.

Expect a mge rate loading, admin fee, and defined period for CTL, if you obtain the lenders permission (to which I may not admit it is CURRENTLY let) .... good luck !

Holly

bigadaj

Excellent advice Holly, just wonder if the cgt comments may be optimistic give the OPs circumstances.

holly_hobby

Possibly Big., but IMHO can't afford to leave out this aspect in the circs and a general advice situ.

The real implication (if any) will of course only be realised at disposal.

Holly x

WibbleSnarf

As stated above, you are in breach of your contract. You also ought to be aware that as a landlord you now have legal obligations with regard to things such as gas safety checks, smoke alarms and other stuff. Suggest you speak to the lender as soon as possible and also get some professional advice on the legal implications of being a landlord.

As it stands, the lender could repossess the house and turf out your poor tenant who is renting from you in good faith, presumably with a proper tenancy agreement and a deposit correctly lodged in a tenancy deposit scheme?

DaliahGreen

Hi all, thanks for the responses everyone.

I totally realise I'm in breach of Ts and Cs at the moment, it all happened very quickly hence why I'm in the process of sorting it out now. I should have explained that right now I have a very close friend in the flat for a month or two as a bridging measure, and will move to something more formal if I can get it all sorted out.

If not, I guess I'll have to quit the new job and move back.

I guess I always knew I need to advise the mortgage company, probably why I was posting here was to get a heads up on what's likely to happen when I do and whether they're likely to agree (or if there's anything I should particularly say or not say). If they're most likely to say no, I guess I'd like to be able to think about that in advance. I'm aware mortgage will go up, and that I'll need to sort out all the insurances

Also, I'll be making a loss so I don't think CGT is an issue.

WibbleSnarf - yes, I'm on top of all the standard landlord duties, am pretty organised with that kind of thing.

Anyway, I have a call planned in with them for Monday so I'll let everyone know how it goes.

If anyone has experience on whether a mortgage company are likely to agree on this, it'd be really helpful.