Buy flat and rent one room?

ColdHardCache

Hey all,

I am looking to buy a flat, which will be my first home. I am a young professional and a first time buyer.

I would look to put down a deposit for a 2 bedroom place, live in one and rent one out.

Buy to let is not on the cards due to a high risk factor and banks not lending to a first time buyer.

Would it be possible to do this with a residential mortgage? Has anyone had any experience with this?

This situation is vague to me, since I would be a live-in landlord and this wouldn't be all buy to let.

Thanks,

Cache

RAS

You are talking about taking on a lodger which is completely different legally from creating a tenancy.

Do you know about the rent a room scheme?

Kynthia

Taking in a lodger is not creating a tenancy so is usually fine on a residential mortgage. Do some research on whether your contents insurance is affected and what to put in the contract.

ColdHardCache

If no tenancy agreement is created and the lodger does some damage or doesn't pay up, what would happen?

Cheeky_Monkey

You would make a deduction from their deposit and ask them to leave

ColdHardCache

Cheeky_Monkey wrote: »

You would make a deduction from their deposit and ask them to leave

Sure, but 'ask them to leave' - what if they don't?

Just thinking of the worst case scenario.

Thanks

Pixie5740

Electric cattleprod?

Change the locks on them whilst they're out?

Call the police?

You would want to reference whoever moves into your home, and whilst referencing is not foolproof, it should help you weed out some of the less desirable lodgers.

RAS

Lodgers have few if any right to remain in the place they live, assuming England or Wales, unless you give them those rights.

Courtesy suggests that if they pay monthly, it is a good idea to expect both sides to give a month's notice but weekly, a week's notice.

In the case of complete break-down because of behaviour or damage, an hour might be acceptable. Some here have literally packed the goods and put them outside the door.

If it got really bad, you would need to ask the police to attend (to prevent a breach of the peace) rather than risk the lodger calling the police and end up with someone who does not know their tenant from a lodger.

heytoki

Kynthia wrote: »

Taking in a lodger is not creating a tenancy so is usually fine on a residential mortgage. Do some research on whether your contents insurance is affected and what to put in the contract.

Can you tell the lender that you are planning to rent the other room out?

booksurr

heytoki wrote: »

Can you tell the lender that you are planning to rent the other room out?

you can tell anyone anything but I assume that was not your question:

if your question was actually must you tell your lender the answer is no

if your question was will the lender take the lodgers rent payment into account when calculating your affordablity and amount to lend you the answer is no

if your question was actually must you tell your insurer the answer is yes, although the impact may be none depending on your insurer and their attirude to lodgers.

G_M

A written 'Lodgers Agreement' is sensible, to specify rent and basics. As long as both sign it does not need to be formal though you can get them online or at Staples/Smiths.

My advice? Specify 1 weeks notice either way. It's your home: if it does not work out, you do not want to be sharing with someone you don't like, or feel uncomfortable with, for a whole month....

You can always choose to give longer if you wish ie if you're just evicting so your partner/mate etc can move in and the lodger says 'look it's gonna take me a couple of weeks to find somewhere'.

Have clear 'house Rules' (eg shared costs, noise, overnight guests etc). If these are clear/agreed upfront it avoids problems later.

LODGERS (Licencees/Excluded Occupiers)
A lodger (broadly) lives in the same property with their resident landlord, and shares facilities. Unlike tenants, lodgers have few rights.

The Housing Act 1988 provides definitions of 'Resident Landlord' and 'same property' (S31 & Schedule 1 (10).

There is advice for landlords considering taking in lodgers here:

LodgerLandlord (General information site)

Landlordzone (General advice on taking in lodgers)

Renting out rooms in your home (Government info)

Rent a Room Scheme (Government scheme for tax-free income from lodgers)

21 tips (Tessa Shepperson's Lodger Landlord website)