Permission to let has lapsed!

happycamel_2

Have you had a recent valuation from an estate agent. We're on the market at the moment and both properties (the one we live in and our BTL) have gone on at tens of thousands more than I expected and we have plenty of interest. You may not be in negative equity at all.

ANDRUAFER

Thanks everyone.
Annie- I made a loss in the first two years as it was on a fixed term- I've broken pretty even give or take a £30-40 since then. (If I take into account the LL insurance and letting agents fee).

It's slightly odd but I moved several times since I let my house out. I've not been proactive enough in letting my lender know where I am I don't think- I know this is poor. I did write to them with my last address but not sure if they've actually professed it.
I'm now seriously worried that both my lender AND HRMC have been contacting me and I've not received the letters. Oh crap

ANDRUAFER

Well I've just been going off right move really- the house has dropped by 20k since I bought it for £110k. It's not in a great area and some immaculate little houses are going for a lot lot less than mine.

ANDRUAFER

Oh I should add that my house had a 5 month period of emptiness a year after I left it. I had to switch agencies (and pay new one £450 to find me a new tenant) so that blip cost me over £2500.

(Sorry i added that because I said upthread that my current tenant has been there from the beginning - but I should jabs said she has been there the longest/since the gap

Pixie5740

mcauley wrote: »

Thanks everyone.
Annie- I made a loss in the first two years as it was on a fixed term- I've broken pretty even give or take a £30-40 since then. (If I take into account the LL insurance and letting agents fee).

It's slightly odd but I moved several times since I let my house out. I've not been proactive enough in letting my lender know where I am I don't think- I know this is poor. I did write to them with my last address but not sure if they've actually professed it.
I'm now seriously worried that both my lender AND HRMC have been contacting me and I've not received the letters. Oh crap

How have you calculated this loss?

mcauley wrote: »

Well I've just been going off right move really- the house has dropped by 20k since I bought it for £110k. It's not in a great area and some immaculate little houses are going for a lot lot less than mine.

Might be worth getting 3 estate agents to give you quotes rather than going off Rightmove.

mcauley wrote: »

Oh I should add that my house had a 5 month period of emptiness a year after I left it. I had to switch agencies (and pay new one £450 to find me a new tenant) so that blip cost me over £2500.

(Sorry i added that because I said upthread that my current tenant has been there from the beginning - but I should jabs said she has been there the longest/since the gap

Void periods are part and parcel of letting property. Have you shopped around agencies to see if you can reduce the fees? Is the rent you charge a realistic market rate or is there scope to increase it?

ANDRUAFER

The £30-40 figure is what I make currently (assuming there are no repairs and given that I've just paid £300 for roof repairs it's not really a profit!)
When I said I lost money - I simply mean because I was in a fixed 3 year term with my mortgage. It was £630 a month and I was clearing 500 in rent. I also had letting fees and usual repairs etc so that's snag I mean when I said I was running at a loss. I realise however that my calculations are somewhat amateur!!!

ANDRUAFER

Yes rent is pretty par for the course in the area. All agencies in area charge 10% as standard, plus I already switched agencies when the previous one failed to let it for 5 months. The new agency filled it within a week! Gutted really - it was so much money to lose.

franklee

mcauley wrote: »

When I said I lost money - I simply mean because I was in a fixed 3 year term with my mortgage. It was £630 a month and I was clearing 500 in rent.

As everyone else has said for the mortgage it's only the interest part that counts as an expense. Yet another reason to get in touch with the lender and get your contact details up to date - you need the statements so you can see how much of that mortgage payment was interest and how much was repayment of the capital. Without this information you won't know what your profit/loss was and you need to know to fill in your tax return. Also without the statements you will not know how much you currently owe on the mortgage given you will have repaid some of the capital over the last four years.

lovinituk

mcauley wrote: »

The £30-40 figure is what I make currently (assuming there are no repairs and given that I've just paid £300 for roof repairs it's not really a profit!)
When I said I lost money - I simply mean because I was in a fixed 3 year term with my mortgage. It was £630 a month and I was clearing 500 in rent.

That's not necessarily a loss for tax purposes. Of the £630 repayment, lets say for example that only £330 of it goes towards the interest on your mortgage. That would mean you have made a gross profit (before any further expenses) of £500 - £330 = £170 per month.

You need to find out how much of your mortgage repayment is for the interest.

G_M

lovinituk wrote: »

That's not necessarily a loss for tax purposes. Of the £630 repayment, lets say for example that only £330 of it goes towards the interest on your mortgage. That would mean you have made a gross profit (before any further expenses) of £500 - £330 = £170 per month.

You need to find out how much of your mortgage repayment is for the interest.

Just to explain/expand on that.

By using the rent to pay off part of the debt on your mortgage (the capital element) you are reducing what you owe the mortgage lender. In that sense (and for tax purposes) you are making a profit but choosing to use that profit to reduce your debt.

As explained, any mortgage payments towards paying interest are tax deductable as they are not profit.