Want to let my property without Consent to Let?

G_M

button409 wrote: »

If we get CTL, then no I cannot afford to let out the property, which is what I was considering letting it without getting consent. Letting without this CTL would mean I am able to move, still cover my mortgage, as well as other costs (insurances etc) and make a small profit, to be saved in case anything went wrong wih the property.
I am not considering this option to make money, or to rip off my lender, I am considering because I have no other option, due to the downturn in the market.

I do sympathise. Losing £ on a property is a ****.

And negative equity is a bigger *****!

But of course you are "considering this option to make money, or to rip off my lender..."

You 'make money' via a) your 'small profit' and b) by avoiding the losses.

You rip off the lender by increasing their risk, not paying the fees due, and breaching the terms of your contract.

I agree with others that frankly letting is not the solution - it brings all sorts of risks. Reduce the price, pay off the negative equity, put the property behind you and move on with life.

franklee

button409 wrote: »

If we get CTL, then no I cannot afford to let out the property, which is what I was considering letting it without getting consent. Letting without this CTL would mean I am able to move, still cover my mortgage, as well as other costs (insurances etc) and make a small profit, to be saved in case anything went wrong wih the property.
I am not considering this option to make money, or to rip off my lender, I am considering because I have no other option, due to the downturn in the market.

This plan is short of an exit strategy. Say you get in a tenant and then the lender discovers the let. They charge you the CTL that you cannot afford. What do you do? You cannot get rid of the tenant or sell overnight. You've made commitments to live elsewhere so you cannot move back even if the tenant left. So month on month the debt increases and your contingency is all gone. It seems your best plan is to stay put, save, pay off the shortfall in the mortgage. Besides if you cannot afford the CTL fees you cannot afford no rent coming in should you get a void, big repair bill, non paying tenant etc. Basically when you're in a hole stop digging. It's crap dragging a tenant into your financial mess as it's costs them money to move in and then out again plus the stress of dealing with an unauthourised let when you go under.

button409

Thanks everyone. Will just keep waiting and hoping my mortgage lender will reduce their rates for CTL in the not too distant future.
Just so frustrating being stuck due my flat.

Caladan

morpheusfire wrote: »

Completely understand the OPs position.

I have a mortgage with HSBC on a residential property I bought 2 years ago.

Had to move jobs after 6 months and asked for CTL, which they granted for 12 months.

Requested CTL again in December which they granted again for 12 months.

Now I'm off their fixed rate and onto their variable rate, which they have generously reduced, I will rent out the property for the next 6 months until CTL runs out and then ask for it again.

Not sure if they will change my rate, regardless of whether they grant CTL or not (they didn't previously) because if they do then I will have to put some money down to change it to a buy-to-let.

My issue is that I have enough saved to put money down for another deposit, which I don't want to use on the original property (hoping to get CTL for a while and use it as an investment!)

What are peoples' thoughts on the chances of me getting another residential mortgage if I got CTL on the first one? (mine and my partner's salaries could cover both mortgages and my unsecured loan if necessary)

Depends on the lender. Most will not consider the rental income as you don't have enough of a history as a land-lord (HSBC for example requires 3 years tax returns showing your rental income) and as it is formally still a residential Mortgage rather than a Buy to Let Mortgage, they'll include the existing Mortgage payments as an outgoing, vastly reducing the amount you can borrow.

As an aside, whilst HSBC doesn't charge punitive rates/admin fees unlike most lenders when applying for CTL, they will not grant CTL indefinitely (you're lucky to get it 2 years in a row, I'd be very surprised if you got a 3rd year), you need to sort that out at some point.

If you qualify for their BTL Mortgages that's your best option (it'll cost you more, and the criteria is strict). Otherwise talk to someone in branch and get their opinion.

hildon233

I am an accidental landlord in an unusual situation.

I paid off my (Vrgn1) current account mortgage 6 years ago but did not close it. The account is now in credit (by quite a bit). I am keeping it open in case I ever need the facility, but I have no plans for using it right now. There is 12 years still to run on it.

The LTV would be around one third, even if I made withdrawals right up to the amount on the facility. So risk-wise it is a no-brainer for the bank. It is as good a bet as they could hope to have.

I moved to another town a few years ago and live with my partner there, in her place. So I let my house to tenants (without even realising the bank might want to know about this). They are very good tenants, the rent is always paid on time and the place is kept in excellent condition. If they move out, I could easily get new tenants at the same or higher rent.

A busy-body in the council told the bank it was a rented property and now the bank (v1) are chasing me to fill obtain Consent To Let from them. I don't want to engage with this process, as I suspect they may refuse it on stupid technicalities (it is in reality a very safe loan but their crude ways of assessing risk way not judge it that way).

What will happen if I just ignore them? They owe me money - not the other way round. So they have no leverage over me in terms of increasing interest rates.

I suppose they could ask me to close the account due to breach of contract - but I doubt they will go that far. I have never been in arrears in the whole 13 years I've had the mortgage.

I'd like to keep the facility if I can; it might come in very useful one day! And I don't really want to pay them an annual fee (and go through annual hassle) for CTL either.

Does anyone have any experience of cases like this?

Yorkie1

You are breaking the terms of your mortgage by having let it out without consent to let.

The lender is completely within its rights to force you to redeem the mortgage if you refuse to engage with it.

Do you really want the hassle?

Have you complied with all your other LL obligations? Gas safety check? LL's insurance?

wannahouse

button409 wrote: »

Hi everyone,

I'm hoping someone can help me! I purchased my property in 2007 at the height of the property boom, and now want to move. I am currently on my mortgage lenders variable rate, as our fixed term has now finished. We have had it on the market now for 18 months, at a price 10% lower than the price we paid, and have been unable to sell. We are unable to drop the price any further due to the outstanding mortgage (we were already looking at losing £16k if we sell at the current asking price).
Properties in our area rent out very quickly, as and we are now wanting to rent out our flat. At the rental income we would receive (minus landlords insurance/agents fees etc) we would be making a profit of around £60p/m on the flat -nothing significant.
I contacted my lender regading CTL, and they have said that yes they are happy to grant this, but only if we pay £1000 fee, and they will then increase our payments by nearly £400 p/m!!!!!!!!!!!!!!!! This would make the mortgage cost much higher than the rental income, and therefore we would be unable to move.
We are in a very difficult situation as we are desperate to move. We have seen several mortgage advisers who have 'unofficially' advised us to rent the property without gaining CTL, telling us 'everyone does it', and some even admitting to doing it themselves. We are now considering whether this is something we should do.
We are not thinking of doing this to make a profit (and would be making very little), but purely because we are stuck.
I am worried to death about what could happen if our mortgage lender finds out, and we haven't got the correct CTL.
Any help or advice would be greatly appreciated.
Thanks!

why are you asking strangers opinions on this???
you decide what you want to do, and then do it...