Consent to let ending, but keep renting?

regprentice

Lovin_It wrote: »

foxy-stoat
from halifax website - not exactly the end of the world -

If you let your property or we reasonably believe you have, without our permission:
We can charge you interest on top of another rate you're paying so that there is an added rate; and
We may make you pay a regular additional payment.
We may also backdate the extra interest or additional payments to when you originally let your property, or to when we believe you did so.

in 2014 HMRC stated they had identified 900,000 2nd home owners and they were going to work through each of them to identify landlords not declared for Tax.

If Halifax have you listed as CTL or identify you as BTL on a resi mortgage they will (eventually) advise HMRC.

All lenders are under additional pressure to correctly identify Commercial lending on their books under new banking capital rules. you can expect them to be putting time and money into identifying 'hidden' landlords and BTL lending on their books.

The Halifax rate increase for a BTL mortgage (as per your quote ) could be more than double your current interest rate.

HMRC penalties for 'deliberate' failure to disclose income (evidenced by having taken as long a CTL as you can have, and then continued to let despite having been advised otherwise by your bank) are as high as 100%.

You are unlikely to make a profit under the new s24 tax rules at roughly 6-8% interest, especially as all income (as opposed to profit) is subject to tax.

According to todays papers rents are starting to fall for the first time in living memory. House prices cant continue to grow at their current rates. What you are making now is probably the most you will make for the forseeable future.

Compulsory landlord registration has already been implemented around parts of the country (ie the whole of scotland, where i live).

IMHO HMRC should be your biggest worry, and all the pieces are falling into place for them to be able to mop up the vast majority of 'hidden' landlords in the next few years. It reminds me of friends who contracted in finance for years via overseas agencies and who paid minimal tax but who are now being systematically rounded up by HMRC for 5/6 figure sums as many as 8 years after the fact.

fodderstompf

Oh, I declare to HMRC, and have landlord insurance etc etc. I went the whole hog. But I'm thinking a bridge too far was asking for the CTL from HSBC, it's forced me into a corner.

Brock_and_Roll

Good to see that all square with the HMRC.


With regards to the CTL, I am not sure I can see the difference between this situation and say, making false representation on an insurance application.


At the end of the day, the lenders price their products dependent on risk - BTL is higher risk for a variety of reasons hence higher price. If you cant afford to be in the BTL game with rates at their current historic lows, then probably best if you do sell up now.


Given that you have already had a CTL in the past with the lender, then the chance of being rumbled now is obviously higher. I would not expect plod to come knocking, but there is a good chance they would call your mortgage in.


Finally, whilst you may have landlords insurance, you should check very carefully the terms of your buildings and contents insurance. I know from running a B&B business that many policies are potentially invalidated.