Remortaging to BTL when overseas

arch1024

Hi, first time post here.

My wife and I own a 1 bed flat in a listed building in Edinburgh since 2005.

A couple of years ago, we moved to Sydney via a secondment with my work. Whilst we were away, we let our flat (and still do) to a friend of a friend, whilst remaining on a residential mortgage as we thought we would be back before our mortgage expired and would roll into the banks SVR.

Now we expect to stay in Sydney for another 1-2 years so we feel we should move to a BTL mortgage as we don't have consent to let under our existing mortgage.

We are back in the UK for a month in August when we intend to finalise the remortgage.

Our issues are as follows:

1. Our tenant doesn't have a formal tenancy agreement, he pays a rental amount to match our mortgage repayments.
2. Only 1 earner whose salary is now AUD, not GBP.
3. Now have a dependent too.
3. We haven't had the flat valued since 2005 although we have seen a similar flat on the same street advertised at a value which would give us around 84% LTV so we would be looking at LTV of about 80% by using some of our savings.

From a scan of the UK mortgage market, BTL @ LTV of 80% isn't freely available.

What are our options - particularly around remortgaging with an AUD salary and whether this would be acceptable - any advice would be greatly received!!

Thanks all

ognum

so who has been paying the tax?

G_M

If the tenant pays you direct(ie into your bank, not to your UK agent) then HMRC can demand the tax you owe off the tenant. Do they realise this....?

See: HMRC (Non Resident [= overseas] Landlord Scheme)

If you have ignored the mortgage consent, have you ignoredall your other responsibilities too:
New Landlords (information for new or prospective landlords)

arch1024

Hi, thanks both for the responses.

For the first 12 months, we didn’t pay any tax nor did the tenant – when the arrangement started to become more than short term, we notified HMRC and have made catchup payments for this time and now pay HMRC direct each month (whilst claiming an offset of this tax against the Aussie tax paid in our annual tax returns in AU).

Thanks also for the links, very helpful to see all of the obligations – there’s a few on there that we aren’t compliant with right now – to be totally honest we weren’t compliant with a lot of them 12 months ago but have subsequently rectified a lot of them but we still have work to do to meet them all, including either remortgaging to BTL else gaining consent to let from our existing mortgage provider – the former being preferred as currently it is an interest-only mortgage and we would like to make capital repayments each month as well.

Based on the guide, our first point about is a no-brainer then, we need to organise an agreement fast to formalise the arrangement.

I wasn’t sure if people had much awareness of mortgage applications using a non-GBP income?

And would the bank include a valuation in any mortgage application as part of their fees or should we get a separate valuation anyway?

Thanks