New buy to let or just inform existing mortgage provider?

UKSBD

I will be letting out property soon.


Have approx. £45k mortgage on property worth £270k


Currently with Nationwide.


From what I can make out on the Nationwide site, I just have to inform them (which costs £40) and rate goes up by just 1% after 6months.


Is it best to just do this rather than taking out a new buy-to-let mortgage?

brit1234

I think you need their permission to consent to let and if you go interest only you need a repayment vehicle.

Thrugelmir

UKSBD wrote: »

I just have to inform them (which costs £40) and rate goes up by just 1% after 6months.

You seek their approval. As without it your are in breach of your mortgage terms and conditions.

UKSBD

brit1234 wrote: »

I think you need their permission to consent to let and if you go interest only you need a repayment vehicle.

I wouldn't go interest only, would just carry on with repayment.
Is there any reason they wouldn't give consent?


£45K mortgage on £270k property, 14 years left to run.


I have a 2nd property £350k mortgage free.

Thrugelmir

UKSBD wrote: »

Is there any reason they wouldn't give consent?

No there isn't. However consent is granted totally at lenders discretion. There's no right to.

dimbo61

The big question is WHY are you starting a business ?
Renting a property and becoming a Landlord?
How about £220,000 Sat in the bank after selling costs !
Nice new car, holidays to exotic places, part time work, help the kids, etc
What yield will you get from renting, what tax will you pay, do you live near by ?
On hand 24/7 if the boiler breaks down ! Capital gains tax after 18 months
Lots to think about

UKSBD

dimbo61 wrote: »

The big question is WHY are you starting a business ?
Renting a property and becoming a Landlord?
How about £220,000 Sat in the bank after selling costs !
Nice new car, holidays to exotic places, part time work, help the kids, etc
What yield will you get from renting, what tax will you pay, do you live near by ?
On hand 24/7 if the boiler breaks down ! Capital gains tax after 18 months
Lots to think about

Not technically doing it as business, just personal letting


Won't be renting, moved to a mortgage free property in December 13


Don't want to sell and would rather have 220k in property rather than bank, already work part time, got another 5 years before kids will want financial help (hopefully)


Will get approx. £800 a month, current mortgage approx. £300, annoying thing is I have been paying full council tax, water, phone, broadband, tv licence (even Sky), etc. on it for past 18 months, even though as good as empty.


New electric heating system installed last year (no boiler or gas to worry about)


Capital gains starts from about now anyway as current property was delegated as main residence in Jan 2014
Will ensure I stay under the higher tax band


Lots to think about yes, but I've been thinking about it for 18 months

Thrugelmir

Factor in the changes announced in July's budget with regards to interest relief. May take the shine off the investment.

benjus

UKSBD wrote: »

Not technically doing it as business, just personal letting

It IS a business, even if you're renting it out as a private individual. You are providing someone with a home in exchange for money - that's a business. This guide for new landlords is very good: http://forums.moneysavingexpert.com/showpost.php?p=67759929&postcount=7

If you can't think of it as a business and still think of the place as "your" property which must be cared for in the way you'd like, please don't become a landlord - you and your tenant will probably make each others' lives a misery.

andyfromotley

Its a doddle doing this with Nationwide, i have just done it with my mum on her UK home.

UKSBD

benjus wrote: »

It IS a business, even if you're renting it out as a private individual. You are providing someone with a home in exchange for money - that's a business. This guide for new landlords is very good: http://forums.moneysavingexpert.com/showpost.php?p=67759929&postcount=7

If you can't think of it as a business and still think of the place as "your" property which must be cared for in the way you'd like, please don't become a landlord - you and your tenant will probably make each others' lives a misery.

I said technically.
I know it is to be treated as a business, but I don't want it to be seen as a *property business* with the other tax considerations to worry about.