Consent to let or don't bother telling the bank?

mrginge

junglejim2 wrote: »

Of course we all know what you are proposing is "fraud".
However you mention you know plenty of people who have let their property whilst on a residential mortgage without problem.
You will read plenty of horror stories on here about the consequences, I once read that someone was sent to prison for perpetrating this crime....yeah sure they did.
Fact is 1000's are doing this without a problem, many are forced to do it by the inflexibility of their lenders.
Maybe take a chance.

Well it isnt fraud and no-one would ever get sent to prison for it.

But i like how you refer to other misleading posts on here and then state your amazing unqualified 'fact', followed by an inaccurate assessment of mortgage lending criteria and risk.

Well done.

sinbad182

This is a site populated with many professional landlords.

You're always going to get a vehemently 'anti what you're suggesting' response as you're cutting corners and not abiding to the rules- you cant deny that. Add in the moral indignation that the masses on here enjoy displaying at every opportunity and your OP becomes pretty pointless.

I have to say from my experience your chances of getting caught out are slim. Anecdotal evidence would suggest that IF you we're caught, the worst case scenarios being peddled here are unlikely.

But that doesn't change the fact you're suggesting doing something you shouldn't, and should know the possible risk.

lessonlearned

BTL is a business.

Be businesslike. Do it properly and get all the tax perks, save yourself a load of hassle, protect your investment and stay on the right side of the law.

What's wrong with that........

BTL interest only mortgage - tax deductible
Repairs and maintenance - tax deductible
Insurance - tax deductible
Management Fees - tax deductible

When you come to sell you can minimise your CGT liability

Buying costs - solicitors, all searches, surveys, mortgage arrangement fees, stamp duty
Selling costs - agent's fees, solicitors

Do it illegally and don't get caught - you can't get any of these perks.

Do it illegally and get caught - it could cost you ££££'s

Treat it as a legit business. You can both save and make yourself some money.

gazter

ognum wrote: »

You will be committing fraud and putting your property and your tenants at risk. Will travelling be carefree if you are thinking about this?

Fraud my a*se. If that is fraud, so is me using my sky broadband for business purposes.

What's that? The broadband police knocking at my door
"Hello Sir, it has come to our attention that you have, with malicious intent, being using a residential product for business related purposes, anything you say will be written down and used against you"

Turnbull2000

If consent to let will cost you money (other than a small fee), don't bother.

lessonlearned

A Consent to Let will generally attract a higher interest rate than a residential mortgage which in turn will cost you more than a BTL interest only mortgage.

If you have 25% equity then go for a BTL mortgage. It will be cost effective and tax efficient.

You can claim tax relief on the BTL mortgage against your rental income. You cannot claim tax relief on your rental income if you have a residential mortgage.

You may get away with not declaring letting out your property for a short while - if you are lucky, but HMRC and your lender will catch up eventually.

There will be a hefty tax bill, plus interest plus penalties from Her Majesty and who knows what the lender will insist you pay them back.

Do it right and get the tax relief from day one.

grifferz

lessonlearned wrote: »

A Consent to Let will generally attract a higher interest rate than a residential mortgage which in turn will cost you more than a BTL interest only mortgage.

If you have 25% equity then go for a BTL mortgage. It will be cost effective and tax efficient.

Just out of interest..

If you have >25% equity and want to rent your property out, should you always ask for a BTL mortgage then? Is a consent to let something that is added to a residential mortgage, generally comes with interest rate rise and is only for people who can't qualify for BTL mortgage?

Can you get a BTL mortgage if it is your only property and it's just that you are going to be away travelling? I thought that to qualify for a BTL they like you to be a home owner already and have >25% equity in the rental property?

agrinnall

Turnbull2000 wrote: »

If consent to let will cost you money (other than a small fee), don't bother.

It's not going to cost as much as having the mortgage foreclosed and the house sold quickly by the bank so they can get their money back.

lessonlearned

Hi Agrinall

Generally, if you want to let out your property, you will get a better deal on a BTL. CTL is generally a short term option for "accidental landlords". Often the max period is 12 months, although some might go to 2 years. The lender may up the interest rate.

Your best bet is to get a broker to run over your options. A first meeting will be free.

Yes for a BTL you will probably need 25% deposit/equity.

Re do you have to be a home-owner. Not necessarily. This is where the broker comes in. They have access to funds that may not be available to the high street lenders.

Hope that helps.

agrinnall

lessonlearned wrote: »

Hi Agrinall


Hope that helps.

I assume you meant to address this to the OP rather than me.