Consent to Let & Selling Property

Floxxie

I'm about to ask my lender if I can have consent to let out my property.

However I currently have the property for sale but there is no interest and paying a full mortgage, council tax and unoccupied insurance on an empty house is draining me financially.

I understand that I have to be considering moving back in the future. What position would the lender take if I have the house on the market?

The lender is Woolwich.

Thrugelmir

Do you want to run a business and become a landlord? As it's not necessarily the answer to your financial woes. There's a risk it will merely compound them.

Floxxie

I think having the mortgage paid is better than having mortgage arrears

Thrugelmir

Precisely my point. Property is empty or tenant defaults then no income. Being a landlord isn't merely a question of collecting rent cheques. Property will require upkeep over time if it's to maintain value.

Floxxie

Completely agree which is why the property has been empty for 5 months, however I need to cover the mortgage payments (and not pay the council tax and insurance).

kingstreet

The lender won't know it's on the market, unless you tell them.

However, if you are going to let the property, you are committed to at least the length of the tenancy, so keeping it on the market during the tenancy is unlikely to be possible.

Floxxie

Thank you Kingstreet. I have to keep the property on the market as I have to be seen to be trying to sell it.

The potential tenants are aware of the situation and I shall agree with a break clause with compensation if it did sell within the tenancy term.

RickyC_IFSWP

I can imagine how much of a financial drain it is. It's not very attractive from a buyer's point of view because nasty tenants can take time to evict though. Also ASTs for tenants are a minimum of 6 months. So any break clause would be after that period.

I don't know where you're living now but another option could be to consider still living at the property but bring in lodgers instead? That'll go some way towards covering the rent and they are easier to evict.. although you'll still need permission from your mortgage provider.

Annisele

Floxxie wrote: »

The potential tenants are aware of the situation and I shall agree with a break clause with compensation if it did sell within the tenancy term.

Assuming you're in England, you may struggle to get your tenants out within the first eight months or so of their tenancy. If they agree to go, fine. But other than in quite limited circumstances, it's difficult to start possession proceedings within the first six months of a tenancy - regardless of what the tenants may have signed.

If you're seriously thinking of starting a business as a landlord, you should read G_M's post on the subject.

You might also find that having tenants in the property seriously limits your market for sale - people who are buying with a mortgage won't be able to exchange until the tenants are out, and so many buyers won't even look at tenanted properties.

Has your estate agent given you any feedback on why the property hasn't sold?

Floxxie

Thanks for your comments. I'm in Northern Ireland and the property is in England so no chance of taking in lodgers.

The reason for it not selling? The change in mortgage rules.

Unfortunately due to an ex-husband's procrastination, I could not accept an offer in February.

RickyC_IFSWP

You could try short or holiday lets or rent it to any trusted friend/family temporarily while you try to sell the property.