Management company in the lease stating we aren't able to rent out the property - Advice needed

Snowman12345

Hi,

We are interested in a flat for sale that seems fairly too good to be true for the area and price.

I rang the EA today to arrange a viewing and she told me that there is a clause in the lease that doesn't allow the flat in question to be rented.

Obviously this is going to exclude potential landlords from viewing the property if we do decide to purchase the property and then sell it down the line, But my question is will this impact and put regular house purchasers off as well who plan to live in it?

I am just thinking about re-sale

Thanks

Comms69

Well it depends on things like location, amenities etc.


But obviously if you buy and then need to move for whatever reason, you cant let it out. so you need to be fairly sure you're in the area for a while.

hazyjo

Not unless they think they may want to rent it out in the future. Some might see it as a plus in that they were all owners in the block, not tenants (no offence meant to tenants!).

davidmcn

It will restrict the market (and possibly the value). It would need to be reported to the lender - I don't know what their typical attitude to it would be. Probably depends on the type and location of property - obviously it will be a bigger deal in an area with lots of rentals.

nicmyles

Most regular house purchasers who have a mortgage won't be allowed to let it out anyway, under the terms of their mortgage. So I'm not sure it would make much difference to most regular purchasers, but obviously may do to some. And some might not accept any limit on what they can do with their property on general principle.

davidmcn

nicmyles wrote: »

Most regular house purchasers who have a mortgage won't be allowed to let it out anyway, under the terms of their mortgage. So I'm not sure it would make much difference to most regular purchasers, but obviously may do to some. And some might not accept any limit on what they can do with their property on general principle.

Even if they have no plans to do so, I think many buyers would prefer to retain the option to rent it out if their circumstances changed in the future. It would certainly put me off a property, if not necessarily rule it out.

PasturesNew

It's a plus point that all your neighbours are owner/occupiers, who have a vested interest in keeping things "as they are" and knowing each other.

A constant churn of tenants in rentals can make life miserable for everybody.

It is a selling point that it can't be rented out.

Snowman12345

Thanks for all the different responses.

Do you feel that Nationwide as my lender would look into this and potentially refuse a lend?

davidmcn

Snowman12345 wrote: »

Do you feel that Nationwide as my lender would look into this and potentially refuse a lend?

It's the solicitor who will "look into it" and flag it up with the lender, as restrictions of this sort are a standard point in the CML Handbook for all the main lenders. What the lenders' responses to it are likely to be, I don't know. It may be dictated by what the valuers think for the particular case.

CocoLouie

The fact that you have had to ask the question shows that it could put some people off. I would personally see it as a positive thing if I was looking to buy to live there long term

Soundgirlrocks

Snowman12345 wrote: »

Thanks for all the different responses.

Do you feel that Nationwide as my lender would look into this and potentially refuse a lend?

I very much doubt it would be a problem for Nationwide as they don't support buy to let (They don't do BTL mortgages or let you re mortgage to finance a BTL as I discovered)