Letting a shared ownership property

tpl

Hi, I was wondering if anyone had any experience of renting out shared ownership properties. The HA said that I can rent it out for maximum of 12 months, and then if I don't come back I have to sell it. Its 50/50. . I want to move for various reasons, but as i'm in default (and paying back debts), I won't be able to get another mortgage for years, so I'm potentially looking to rent in a different area and/or relocating for work. Although I think I will be worse off renting as rents are high the moment, so I'll either be just covering my costs, or will be paying more for renting (it's not a money making thing at all, I just want to move, and would prefer not to have to sell and go back into renting completely, as it will be difficult getting back on the property ladder!) Or I might have to wait until I can get another mortgage which is years away, due to the defaults on my credit report.

Has anyone ever rented out their shared ownership property?

shonzyd

the process you are referring to is 'sub letting' and HA will never agree for you to rent it out for an indefinate period. If theyve said 12months then you are pretty lucky, and this will only be because of exceptional circumstances. The rules are defined by the government so i suspect beyond 12months it will be a no.

So TBH your options are either to sell up or have it as your primary residence (stay put)

tpl

I'm not sure if this means I'm lucky - as I do have a repayment mortgage on 50% of the property, so I thought that would grant me some extra 'freedom', as I'm not a full tenant. I thought as much, but I will check the government guidelines.
Thank you.

shonzyd

think if you owned 100% it would be a diff story. unfortunately you cannot just just rent out 50%.

You havent really touched on the details about the debt/ credit history so cant really advise on the mortgage issue in the future - things might not be as bad as they seem.

tpl

I've held help in the other forum for the debt thing...so that is currently under 'control' I'm also in the process of trying to negotiate F & F settlements with all of them (2), so will know more in a few weeks, where I stand. The defaults were added in 2011. So quite a while before they 'fall off' (4 years approx). But then again, I'll need a deposit to move anyway, so I'll have to try and save for that....and maybe I'll have more have equity in (my half!) of the house by then. So waiting might be the best option. Thanks for your reply : )

shonzyd

tpl wrote: »

I've held help in the other forum for the debt thing...so that is currently under 'control' I'm also in the process of trying to negotiate F & F settlements with all of them (2), so will know more in a few weeks, where I stand. The defaults were added in 2011. So quite a while before they 'fall off' (4 years approx). But then again, I'll need a deposit to move anyway, so I'll have to try and save for that....and maybe I'll have more have equity in (my half!) of the house by then. So waiting might be the best option. Thanks for your reply : )

Good Luck - i wish you all the best!

lvm

You need to phone your mortgage provider and ask for consent to let.

I'd be interested in what they say - I'm looking at renting my property (although Shared Equity, not Shared Ownership).

tpl

So consent is needed from both the HA and mortgage company? If so, I'm assuming they would have to say the same thing....as if they said different things (ie. one said yes, the other said no) that wouldn't be very helpful

I'll do a bit more digging. Will post anything useful if I find anything.
Thanks

Werdnal

Are you also aware of all the other costs and expenses associated with letting a property? Even if you get consent for all those you ask, you need to be aware that it is not all profit and you may still end up out of pocket!

Mortgage may up the payments if they grant consent, then you have to change your insurance as you won't be living there, then provide the tenant with an EPC and Gas safety certificate if there is a gas supply. The HMRC will also need to know you are gaining an "income" from the property and may ask you to pay tax - you complete and annual Self-assessment tax form and they will let you know what you owe them.

Are you going to be able to afford your own rent, your mortgage, repairs and maintenance on the property and maintain your exisiting debts? What if tenants stop paying or wreck the place?

TBH, I think if you are already struggling financially, adding a rental property to the mix may be the last straw!

Much more on all the legal requirements and obligations of letting is here:

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

tpl

Hi, thanks. Yes, I'm aware of most of those extra costs, and have thought it might be too stressful to let it out anyway.(eg. if there are problems with tenants etc)..regardless of the cost. It's not something I really want to do (let a property). I just want my own home, in a more reasonable location - as it can be a bit scarey/tense around here. But because of the defaults I won't be able to do that for some time. I'm not good with extra stress either, so it might not be a good idea to create all the extra hassle, just to pay for rental property which will probably be more expensive, even if the location is better.
Wish I'd thought a bit more about location when I first bought it, but I never thought i'd be able to own a property, got carried away, and didn't think it through too well! Ah well, you live and learn. I'll just have to be patient and make the best of what I've got at the moment!
Thanks again.