Renting out a room on a first time buyer mortgage

Brucey80

Hi, my friend is currently in the process of buying her first house. She has had an offer accepted on a 3 bedroom property and wants to rent out 2 of the bedrooms to friends of hers.

However, they all live together currently in a rented house. In consultation with her bank about her mortgage, they have told her that she is not allowed to rent out a room for the first 6 months of ownership.

Does anyone know if this is a standard term in a first time buyer mortgage? And also would she be allowed to let them live there rent free for those first 6 months (maybe taking cash in hand) and still put them on council tax and let them change their bank details etc?

Any advice would be greatly appreciated, I can find very little on this online.

Thanks

HappyMJ

She can have guests...but not paying lodgers.

What would the mortgage company do? Repossess the house? It's rarely enforced anyway so if she needs a few extra pounds I'd do it anyway and if the mortgage company makes a fuss then just ask them to leave straight away. Lodgers do not have to be given any notice at all.

Yorkie1

Did she accidentally say to the lender that she would have two friends as "tenants"? This may have led the lender to assume she meant she would be letting the property out. In fact, the friends will be "lodgers", which is an entirely different kettle of fish - something the lenders sometimes fail to appreciate.

Has she fully researched what being a live-in LL involves? Tax? Gas certificate?

motch

Yorkie1 wrote: »

Did she accidentally say to the lender that she would have two friends as "tenants"? This may have led the lender to assume she meant she would be letting the property out. In fact, the friends will be "lodgers", which is an entirely different kettle of fish - something the lenders sometimes fail to appreciate.

Has she fully researched what being a live-in LL involves? Tax? Gas certificate?

I think it's more than 2 ie 3 paying lodgers to class it as HMO or similar to have all the gas certificates/mains electric fire alarm/certificates and so on, i'm probably wrong though.

Although it's worth having gas checked, and fire alarms fitted anyway!

Is it £4250 per year tax free with lodgers?

HappyMJ

motch wrote: »

I think it's more than 2 ie 3 paying lodgers to class it as HMO or similar to have all the gas certificates/mains electric fire alarm/certificates and so on, i'm probably wrong though.

Although it's worth having gas checked, and fire alarms fitted anyway!

Is it £4250 per year tax free with lodgers?

A gas certificate is required....http://www.hse.gov.uk/gas/landlords/safetycheckswho.htm...

I have a lodger who pays me rent

You are classed as a landlord, so you need to arrange an annual gas safety check.

and if it weren't then it would be to prove the gas appliance was safe on the date it was tested. If the lodger was to drop dead from CO later on there is a pretty good defence.

motch

HappyMJ wrote: »

A gas certificate is required....http://www.hse.gov.uk/gas/landlords/safetycheckswho.htm...

I have a lodger who pays me rent

You are classed as a landlord, so you need to arrange an annual gas safety check.

and if it weren't then it would be to prove the gas appliance was safe on the date it was tested. If the lodger was to drop dead from CO later on there is a pretty good defence.

I stand corrected, thanks (although I did say I was probably wrong:))