Need to obtain permission from NatWest to rent my house out

Miss_Fox_2

Hi
Has anyone done this before? Is the process straightforward? Is there a cost?
My house is currently sat empty (my ex and I both moved out) and it is currently on the market for sale but its only had one viewing (5 weeks ago) with no other interest since. I don't believe it's going to sell so I need a plan B because I'm spending £550 a month whilst paying to live elsewhere (my property is in Yorkshire, I now live in Warrington).
Anyone who has done this before, I'd really appreciate the advice!
Thanks
Liz

go_cat

If it is up for sale why not reduce it to encourage a quick sale

Being a landlord is not easy, tenants get minimum of 6 months tenancy which means you can't sell it for that time, also having tenants may put off a sale as buyer cannot complete until vacant possession

Is your ex contributing to mortgage as well?

Miss_Fox_2

It's on the market for £105k and we still have £102k left on the mortgage. Our house is a semi, yet a detached property sold for £102k in our street so I think any offer we get we'll be low balled and unable to accept.

I've been warned over the tenancy front, I'm just worried its the only avenue.

Werdnal

The process is known as Consent to Let or CTL.

You have to formally apply and each case is taken on inidividual circumstances, ie just because someone esle is with same lender and gets consent, doesn't mean you automatically will. They look at things like Loan to Value of the property, how long you have had mortgage etc. They can charge a set-up fee, up the monthly payments, review the deal every year and can rescind consent at any time. They may also stipulate how much rent you should charge, who you can let to (no DHS etc). They can also refuse!

Is the property jointly owned between you and your ex? You will both be liable for tax on the rental income. If it is just in your name, you will bear the whole tax liability. This can also affect any benefits you claim - Tax credit etc, as it is classed as income.

Are you aware of all the other laws and costs of letting? Many people think you just bung a tenant in and thats it. You need to research it fully to understand the legal stuff and your obligations as a landlord. Read this:

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

and all the links it contains. Becoming a landlord is not always the easy answer as it brings its own problems, stress and hassle. How are you going to afford the mortgage and your own living expenses if something goes wrong with the tenant and rent stops? What about repairs and maintenance, you can't just tell tenant you cannot afford to fix the heating this month!

If you are so far away, you should also find an agent nearby to manage it for you, arrange repairs and inspections, which is obviously another extra cost.

How much rent do you think you will be able to get? By the time you pay £550/month mortgage (you can only deduct mortgage interest from the tax you pay and that figure is if they don't increase it for CTL), agent fees, LL insurance, keep a good contingency in reserve for lost rent, repairs etc, I think you will be out of pocket every month - and you still have to keep a roof over your own head.

I would reduce the price and get the place sold, even if you make a loss on the sale price, so you and your ex can make a new start without the complications of a tenanted property standing in your way!

go_cat

Would you not be better cutting your losses ...if your tenant doesn't pay it will cost you more.

Is your ex on mortgage if so he is jointly liable for any negative equity

What have other comparable properties sold for?

TexasChainstoreMascara

I was in a similar situation.

The advice I got was that to rent my house out I must change to a buy-to-let mortgage, although the mortgage company wouldn't let me as I hadn't got enough equity in the house. Without a buy-to-let mortgage a letting agent wouldn't touch it.

In the end I privately let to a close relative which the mortgage company were okay with.

Miss_Fox_2

Appreciate the advice everyone, thanks.
It would make more sense to cut out losses, we already have to factor in 2800 in costs for solicitor fees and estate agent fees. So I don't really know how I can make the situation possible.
If I sold it for between £95-£100k, we owe more than that, so where would we get that money from plus pay for the fees? I just don't think it's a possible option or if it is I'd love to know how!

BitterAndTwisted

It's obviously not worth what you're attempting to sell it for if you're not getting any interest. Over-pay the mortgage and get yourselves out of negative equity.

Do not go into the letting business unless you are aware of the risks and have sufficient funds set aside should anything go wrong.

wheldcj

We have recieved a consent to let from Natwest no problem. Cost us £250 but no changes required to your current mortgage deal. There is a list of caveats but nothing I would suggest was onerous.

pinkshoes

Miss_Fox wrote: »

Appreciate the advice everyone, thanks.
It would make more sense to cut out losses, we already have to factor in 2800 in costs for solicitor fees and estate agent fees. So I don't really know how I can make the situation possible.
If I sold it for between £95-£100k, we owe more than that, so where would we get that money from plus pay for the fees? I just don't think it's a possible option or if it is I'd love to know how!

Of course it's a possible option!

Trust me, the BEST option is to sell it and move on with your life, even if that includes a bit of a debt!

Put the price down to "offers in excess of £90k" and see if that generates lots of viewings.

Remember, you don't HAVE to accept an offer...

If it sells for £90k, then you will be £12k short on the mortgage and £3k selling fees, so you and your ex both need to take a loan for £7500 each to pay off this shortfall.

It's not too big a debt, so with some penny pinching, hopefully you'll be able to pay it off quickly...

You could always post the rightmove link on here if you want some honest opinions and help on how to sell it!

pcgtron

Consent to let was granted to me by Natwest for a £100 fee. The main cadveat being I couldn't rent it DSS which I didn't want to do anyway