Need a mortgage lender who will allow us to sublet

Friendsmovingin

Some friends are having a house built down the road from us, and we said they could move into our self contained annexe for the 6 months or so of the housebuild. They will be paying rent. Unfortunately our current mortgage provider will not allow this (RBS) so I been looking for another. Incidentally realised we should be changing mortgage provider anyway as found we could save £250 month. I have phoned 2 companies today, santander and Nationwide, but neither would allow this arrangement. I would welcome advise on how to proceed and what mortgage lender may be of help. Thanks xxx

kingstreet

Sublet? Are you sure?

Is this a leasehold property? If so, you need permission from the freeholder.

Presuming this is a freehold property, this sounds more like accepting lodgers and requires no agreement from a lender.

You may wish to run it past your insurer though.

ACG

Is all the property on the same land so speak?

Would they not just be classed as lodgers if that were the case? Other than declaring anything over (i think) £3600 to the tax man lenders typically dont have an issue with lodgers.

Holly is probably the one to answer this, shes like a fountain of knowledge.

dimbo61

https://www.gov.uk/rent-room-in-your-home/the-rent-a-room-scheme

You could rent out a room or entire floor for up to £4250 a year under the government Rent-a-Room scheme.

No tax to pay if you earn less than £4250

Yorkie1

As it is a separate, self-contained annexe, you need to double check whether it comes within the rent a room rules or whether it is a separate residence.

http://www.hmrc.gov.uk/manuals/pimmanual/PIM4004.htm

clippy_girl

if they are classed as lodgers, i just did some ringing around the other day and nationwide, woolwhich and first direct all said lodgers were ok if they signed a form (i think its so they can evict them easily if they needed to repossess your house)

kingstreet

clippy_girl wrote: »

if they are classed as lodgers, i just did some ringing around the other day and nationwide, woolwhich and first direct all said lodgers were ok if they signed a form (i think its so they can evict them easily if they needed to repossess your house)

A consent to mortgage is only required for those occupying the property and not party to the mortgage on the day the mortgage completes.