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HSBC consent to let - what next?

Hi. Hoping someone can help.

My husband and I are moving to New Zealand in January. Initially temporarily but potentially longer term.

I'm in the process of writing to HSBC for consent to let out my property (we have already found tenants). I have been with them for 9 years and have never had any arrears - so hoping this should be ok.

They tell me that this will be a temporary arrangement for 12 months.

So what happens after the 12 months? I stupidly took out a secured loan a few years ago and have zero equity in the property, and probably won't still in 12 months.

They can't push me onto BTL as there isn't enough equity, so what would one do in this situation? Would they ask me to stop renting (in which case, I probably won't be able to cover the repayments anyway!).

Thanks

Comments

  • kinger101
    kinger101 Posts: 6,520 Forumite
    Part of the Furniture 1,000 Posts Name Dropper
    edited 6 December 2014 at 5:24PM
    After nine years, you have no equity! In this situation, I'd sell the house to be honest (assuming you're not in negative equity).
    "Real knowledge is to know the extent of one's ignorance" - Confucius
  • G_M
    G_M Posts: 51,977 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Combo Breaker
    darbydoo wrote: »

    They tell me that this will be a temporary arrangement for 12 months.

    So what happens after the 12 months?...

    They can't push me onto BTL as there isn't enough equity, so what would one do in this situation? Would they ask me to stop renting (in which case, I probably won't be able to cover the repayments anyway!).
    CTL is a discretionary agreement to allow a home-owner a temporary permission to breach a fundamental part of the mortgage agreement. It is not designed to help people obtain cheap loans to fund a BTL business.

    When the CTL expires after 12 months, the lender may well agree to an extension for a further 12 mnths if requested, though there is no guarantee of this.

    The alternatives are

    * move to a BTL product
    * move back into the property (you bought it as a home-owner)
    * sell (paying off any negative equity with savings)
    * continue to let, but without consent, and when they find out, face an increase in rates/fees (+penalty?) and /or repossession
  • darbydoo wrote: »
    They tell me that this will be a temporary arrangement for 12 months.

    So what happens after the 12 months? I stupidly took out a secured loan a few years ago and have zero equity in the property, and probably won't still in 12 months.
    After 12 months, they have the right to withdraw consent. Some lenders may renew the consent indefinitely, some will renew a limited number of times, and some will not renew.

    If they choose to refuse further consent, then you will need to evict the tenants before the current consent runs out.

    Your choices are then:
    1. Leave the property empty
    2. Move back in yourselves
    3. Sell
    4. Remortgage as a BTL
  • schwam66
    schwam66 Posts: 161 Forumite
    they will let you do it dont you worry, i am with halifax and we have just had consent granted for the entire tem of the mortgage(till 2018) after which they state i may be able to do it again but more likey have to go to a BTL....best getting consent first before you go telling anything to the tenants....all the best and goodluck
  • Hope you get it.


    Before you leave town, I'd also speak with a mortgage broker can tell you the rough LTV max (and probably additional income requirement) for expat BTLs. Expat BTLs are not always as simple as UK BTLs and last time I looked, needed significant equity.

    Best of luck.
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