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BTL hypothetical question

smallblueplanet
smallblueplanet Posts: 1,140 Forumite
Part of the Furniture 1,000 Posts Photogenic Name Dropper
edited 23 October 2015 at 11:16AM in House buying, renting & selling
We have finally got some sort of financial stability and this has led me to consider investing in a btl property. I don't intend to become a fulltime landlord just a single place. I have a good friend who wants to move there and so would (with proper agreements, etc) make a good tenant.


Would this be a problem with the mortgage company, plus how would it be viewed if the landlord (ie us) visited their tenant and stayed in the property with them for a few weekends in a year?


Thanks.
«1

Comments

  • Bossypants
    Bossypants Posts: 1,286 Forumite
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    When I was first looking to remortgage my house as a BTL, I asked the broker if it would be okay for me to store furniture there for a few weeks before getting tenants in, as my living situation was a bit up in the air. I was told that using it for storage was fine, but I could not stay there myself for any reason. Apparently me spending even a single night there once the BTL mortgage took effect would invalidate it. Supposedly this is to prevent people getting a BTL and using it as a personal residence to avoid affordability checks.
  • silvercar
    silvercar Posts: 50,029 Ambassador
    Part of the Furniture 10,000 Posts Academoney Grad Name Dropper
    Apparently me spending even a single night there once the BTL mortgage took effect would invalidate it.

    Invalidate is a bit strong. It would be a breach of your mortgage conditions if you lived in a property that was bought under a BTL mortgage. the terms normally require you to let the property under an AST. I can't see how staying as a guest of a tenant who has an AST would breach that.
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  • Bossypants
    Bossypants Posts: 1,286 Forumite
    Tenth Anniversary 1,000 Posts Name Dropper
    silvercar wrote: »
    Invalidate is a bit strong. It would be a breach of your mortgage conditions if you lived in a property that was bought under a BTL mortgage. the terms normally require you to let the property under an AST. I can't see how staying as a guest of a tenant who has an AST would breach that.

    Yes, the mortgage terms would be breached, allowing the lender to recall the loan immediately.

    My broker was very clear on the subject, but of course my situation was different, so OP would do best to ask their own. However, I can see how it could be a legally slippery slope, start with this kind of legit scenario, end with one unmarried partner getting a BTL property, renting it to the other, and 'staying over' an awful lot...
  • Pixie5740
    Pixie5740 Posts: 14,515 Forumite
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    What's the point in tying up money in an illiquid asset like property if you're not going to try and make the best return you can?

    What would you do if your tenant turned round and said you could visit for the weekend?
  • smallblueplanet
    smallblueplanet Posts: 1,140 Forumite
    Part of the Furniture 1,000 Posts Photogenic Name Dropper
    Pixie5740 wrote: »
    What's the point in tying up money in an illiquid asset like property if you're not going to try and make the best return you can?

    What would you do if your tenant turned round and said you could visit for the weekend?


    Ay?


    I asked for an answer based on my question, not yours. I want to know if what I am considering would be a problem with the mortgage lenders.
  • Pixie5740
    Pixie5740 Posts: 14,515 Forumite
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    It's an open forum.
  • smallblueplanet
    smallblueplanet Posts: 1,140 Forumite
    Part of the Furniture 1,000 Posts Photogenic Name Dropper
    Pixie5740 wrote: »
    It's an open forum.


    Errr yes it is. What was your point and why?
  • Pixie5740
    Pixie5740 Posts: 14,515 Forumite
    10,000 Posts Eighth Anniversary Name Dropper Photogenic
    The point is that you either want an investment property in which case find one that will give you a decent return and treat it like a business or you want a holiday home. Not some messy halfway house.
  • Innys1
    Innys1 Posts: 3,434 Forumite
    Never enter into a financial transaction with a friend or relative. It always ends badly - for one party or the other.
  • boliston
    boliston Posts: 3,012 Forumite
    Part of the Furniture 1,000 Posts Photogenic Combo Breaker
    Innys1 wrote: »
    Never enter into a financial transaction with a friend or relative. It always ends badly - for one party or the other.

    Letting to a friend could certainly be very awkward if the fiend were to have a change of circumstances that caused them to have difficulty affording the rent.
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