Employment changes during a tenancy & re-upping or moving

BrandNewDay

Hello!

We're going to be renting a home in a different part of Britain. We expect to have no difficulty getting a lease because we are home-owners and my husband has been at the same good job for over six years.

However, the reason we are moving is that his job is coming to an end. I am going to be starting up my own business and my husband is going to be my employee. We expect to be able to earn enough money to pay rent. But, in twelve month's time, will we have trouble either re-upping or moving and signing a new lease?

Edited to Add: we do own a house, now, but we actually rent our current home because we can't live in the house. We also haven't been able to let it. In twelve months, the best we can hope for is to still be paying the mortgage on it. It won't be a home or anything to us. Maybe, someday, we'll be able to sell it. I explain this because it may seem odd that we're home owners who are moving and renting.

tbs624

So, to summarise:

1. You "own" a house that is currently standing unoccupied.

2. You are currently renting a property to live in, a tenancy which you will have secured on the basis of your husband's employment/income (yours too?) and you've also been funding the mortgage on your own property

3. You are about to become self employed and to employ your husband in a new business

Unfortunately, you "expecting to be able to earn enough to pay rent" when you move to a new area won't enthrall the local LLs/LAs. The fact that you presumably have an ok credit record and can presumably produce a reference from your current LL will help but it is likely that you will be asked to either (a) pay 6 months rent upfront or (b) provide a guarantor because your business will be in its infancy and anyone who is s/e is usually required to produce a couple of years worth of accounts.

You say that you cannot live in the house that you own and that you can't let it out. Why can you not sell or let the property that you "own"? Is it in negative equity? Has the Lender refused to grant consent to let?

BrandNewDay

1. You "own" a house that is currently standing unoccupied.

2. You are currently renting a property to live in, a tenancy which you will have secured on the basis of your husband's employment/income (yours too?) and you've also been funding the mortgage on your own property

Yes. We pay the rent on our home and a mortgage on the house that we own.

3. You are about to become self employed and to employ your husband in a new business

Unfortunately, you "expecting to be able to earn enough to pay rent" when you move to a new area won't enthrall the local LLs/LAs. The fact that you presumably have an ok credit record and can presumably produce a reference from your current LL will help but it is likely that you will be asked to either (a) pay 6 months rent upfront or (b) provide a guarantor because your business will be in its infancy and anyone who is s/e is usually required to produce a couple of years worth of accounts.

Signing a lease for the first year/tenancy will be no problem. It's what happens at the end of the first year that I'm worried about.

My husband is still employed and will be employed when we move/sign any leases. I am going to move a month earlier to start up the business and then he is going to move and join me in it. I know that I will be able to single-handedly earn enough money to pay the rent, but he's going to join me in order to grow the business beyond what I can do on my own. If we work together, then we can make double our money. We feel that we can only get ahead by owning our own business.

My husband's job is no longer secure: his employer is looking to sell up and retire. It may be that the buyers will want everything to stay the same. It may be that he'll be made redundant by Christmas (although that is highly unlikely). We are in a very precarious position because of the remoteness of where we are. There are no jobs, here. If we wait for him to be made redundant, then he'll have no job, little chance of replacing it with a job locally, and no way of signing a lease anywhere else. So, we want to make a move before that happens.

We want to move because we need to be near his parents and because there are better opportunities there for business and for our children's education. We currently live in a very remote part of Scotland. The cost of living is very high here and there is no child care so I am unable to work more than a few hours a week. In Oldham, I will have free child care from his parents and everything will be much cheaper. We will be financially much better off.

However, if this situation means that we won't be able to sign a lease in a year, then he may have to find a job with a more established employer and I'll just do the business without him.

You say that you cannot live in the house that you own and that you can't let it out. Why can you not sell or let the property that you "own"? Is it in negative equity? Has the Lender refused to grant consent to let?

We are in negative equity. We can't live in it because of violent neighbours. The police advised that we move. Letting agents won't deal with it - they say the sort of people who would live in such a place are not the sort of people they want to do business with. It's on a list of houses available through the council, but nobody wants to live there (because of the neighbours). The mortgage is very cheap, but we bought before the market crashed and then problem neighbours made it worse.

The monthly payments are really cheap. We just pay it and try not to think about it. We hope that someday we'll be back in the black on it. Obviously, we'd rather not default on the mortgage. It's not in my name, which means my credit wouldn't be affected, but we're willing to do whatever we can to hang on and keep paying. If interest rates shoot up or something horrendous happens, then we may have to let it go. But, we have paid the mortgage for two years, now, since moving out. We were within spittin' distance of being able to cover the shortfall last year. Things may improve!

BrandNewDay

It's not the utter end of the world if we can't get another lease at the end of the twelve months: his parents are willing to be guarantors. The only drawback is that the property we could get would be less than what we can afford because their income isn't great. But, it would be OK. I suppose it would only be for another year or so.

tbs624

You clearly have a lot to deal with - wishing you good luck with your onward move.

You may not, of course, have to move on after the intial Fixed Term tenancy is up. If you continued at the same property under a Statutory Perioidc Tenancy running on month to month under the same terms ( except for those on notice) you wouldn't need to be subjected to further declarations on your income at the time. Even if you renewed for a further Fixed Term many LLs don't seek further checks if you have already proved to be reliable.

BrandNewDay

tbs624 wrote: »

You clearly have a lot to deal with - wishing you good luck with your onward move.

You may not, of course, have to move on after the intial Fixed Term tenancy is up. If you continued at the same property under a Statutory Perioidc Tenancy running on month to month under the same terms ( except for those on notice) you wouldn't need to be subjected to further declarations on your income at the time. Even if you renewed for a further Fixed Term many LLs don't seek further checks if you have already proved to be reliable.

That's what I am hoping!

I was wondering if we should try to find a place that his parents could cosign as guarantors for, but that would mean a tiny place a bit further away from the inlaws. I think we'll just stick to the better postcode, as cheap as we can manage, and then hope for the best in twelve months.

Thanks for your good wishes! I was feeling a bit insecure for a bit! We've had a bit of bad luck with our house, and we're trying to do the right thing while getting into a better financial position. The way I see it, we're going to have a tight year where we just try to pay the rent and put food on the table, until the business takes off.

I am truly very confident that in one year, we will have at least as much income as we do now, with potential for growth. There's lots of money to be made in cleaning houses!

PasturesNew

You can't go leaving a mortgaged property empty .... insurance will become invalid after X days/weeks for starters.

Also, what sort of business? Most rentals prohibit tenants running businesses.... but it all depends what sort really.

BrandNewDay

PasturesNew wrote: »

You can't go leaving a mortgaged property empty .... insurance will become invalid after X days/weeks for starters.

Also, what sort of business? Most rentals prohibit tenants running businesses.... but it all depends what sort really.

The property has been empty, and insured, for nearly two years now. I don't know what my husband did in regards to it, but I know there was something about changing the insurance in some way. Obviously, there is a way of insuring empty houses.

It's a house-cleaning business, so other than the book-keeping, none of the business would take place on the premises.

tbs624

As BrandNew day says there *are* companies who do provide cover for unoccupied properties. Usually have hefty excesses on the policy and specification of certain locks/alarms etc.

BrandNewDay

tbs624 wrote: »

As BrandNew day says there *are* companies who do provide cover for unoccupied properties. Usually have hefty excesses on the policy and specification of certain locks/alarms etc.

Our building insurance is via the council, as it's a terraced property. I suppose we may pay some added premium for vacancy, but I do know we're covered.

I sort of wish we could find some decent person to live in it for free. If they'd just pay the council tax and not trash the place, I'd be happy. But, I don't think it's very likely to happen. I don't think anybody wants to live there, even if it's free.

Fire_Fox

If your mortgage is really cheap to service how bad is the negative equity? Presumably you have some savings in order to start the business or some redundancy money, have you tried to sell the house at auction?

Affordability for renting is going to be a combination of income and outgoings, all businesses are risky in a recession and you will both be relying on the same income stream. So either you need to maximise your income by working all hours which you can't do if you have no control over the premises, or minimise your outgoings by shifting the dead weight of the house.

AFAIK it's not simply the work you do on the premises but running a businessfrom the premises counts so you will need to declare your intentions to your landlord/ agent and to the council. Here in England it's written into many long leases and some house deeds so it goes higher than the AST, but Scotland may be different.

If things don't go as well as you'd hoped with the business or one of you is ill or injured and cannot work you may be entitled to claim benefits, but they won't help with the mortgage or council tax on the house you don't live in. IMO another reason to rid yourself of it by whatever means necessary.