Permission to let has lapsed!

ANDRUAFER

Hi everyone.

I've got myself into a panic. I'm an accidental landlord who moved out of my property to relocate for work just over 4 years ago. I got permission to let from nationwide and all was well. They sent me a letter about a year or so into it to say they would be adding on 3% (yes 3%) to my mortgage I continued to let it after 3 years. I phoned them and argued for hours about it but they wouldn't budge. I moved house again myself and wrote to them with my new change of address.

I've been struck today with the realisation that my permission to let lapsed last May and I've not gained new permission. I think I thought that the charge would just 'kick in' and I wouldn't have necessarily ask them but the charge hasn't been applied so that must mean I was supposed to ask them. I also admit to being grateful at not having to find this money and just 'ran with it'.

It suddenly occurred to me today that they could ask me to pay this money for all of last year since the permission lapsed. They've not written to me so there's a chance they didn't receive/process my change of address.

What can I do? So stressed.

ANDRUAFER

That should say ' would add 3% if I continued to let it out.

BTW- the house is in negative equity.

G_M

Consent To Let is granted to owner-occupiers who temporarily need to let their home (ie while they work away for a year or two).

It is not intended as a substitute for a Buy To Let mortgage which is for those who are letting as a business.

Hence the time limit (in your case 3 years). After the time limit expires you either need to convince them that you are really still an owner occupier, but just need another period (year or whatever) before you return home, in which case they may extend your CTL, or you need to switch to a (more expensive) BTL mortgage.

If you are now letting without CTL, you are in breach of your mortgage agreement. Since they have already advised you of the difference in interest rate if this happens, yes, you could be charged the extra from the date your CTL expired.

Or have your mortgage called in.

Pixie5740

I dislike the term "accidental landlord". You chose to become a landlord rather than sell the property for less than you paid for it.

If you want to continue letting this property then get a BTL mortgage. I wonder what else you're not doing by the book.

ANDRUAFER

Wow- why so harsh? I asked for advice, not a telling off. How many of us on here are in the crappy position of being trapped by crashing house prices and banks - who contributed to that mess, cashing in on homeowners who find themselves unable to sell?

I cannot sell my house. That isn't a option. I know I have to pay the increased interest rates- what I don't want (and can't) is is to pay arrears from last year at 3% more when I've learned that nationwide are charging 1.5% for CTL mortgages.

Is there anyone on here who could tell me whether or not I could simply say that I had moved back into the property last year and now want another term of CTL?

ANDRUAFER

I should also add that the rent I receive just about covers the mortgage and fees. Up until 2 years ago when I was on a fixed rate, it didn't cover it and I had to top up £150 a month. This isn't business - I don't earn a penny.

Pixie5740

Letting property is a business whether you like it or not. Running your business at a loss doesn't change that.

Sure, you could try lying to Nationwide and you might even get away with it. What if they don't grant you CTL anymore?

Do you have landlord's insurance or are you still using the same buildings insurance you had before? If it's the latter then you'll really be up the proverbial creek if the property burns down or something.

Is there no way you would consider getting a proper BTL mortgage? They tend to be interest only and if you start treating this like a business you might actually stand a chance of making some money out of it. Either that or just sell it.

Edit: In answer to your question, "Why so harsh?" This is someone's home you are !!!!ing with.

ANDRUAFER

Thanks for the speedy reply pixie. I'm really not able to sell- I bought it for 110k in 2008 and it's now worth around 90k. I got the deposit from a scheme of public workers (not shared ownership- shared equity)
If I sold I would be in so much debt, plus would likely lose the tenant while trying to sell- which could take years.

I have proper landlords insurance btw

ANDRUAFER

My understanding is that the bank would not give me a BTL - as there is no equity in the house. Is this true?
If I approached them now to ask for one, how would I explain it? I also have a feeling they didn't process my new address when I wrote to them ages ago, because I've not heard from them and surely they'd have written?

anselld

mcauley wrote: »

If I sold I would be in so much debt, plus would likely lose the tenant while trying to sell- which could take years.

You are already in "so much debt" whether you sell or not. What happens when you are forced onto a BTL mortgage and/or interest rates rise? Does the rental income cover the cost? If not, you are just increasing your debt all the time you don't bite the bullet and sell.

ANDRUAFER

Yes it covers it at the moment. I will have to suck up the increased interests rates I guess but surely this wouldn't match up to the £30k I would lose selling it? I would literally have to find 20k to give back to the equity scheme. Where would I find that?