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Is it Possible to Rent Our House?
Beanynut2
Posts: 91 Forumite
Hi
Hoping for any advice on next steps?
My daughter and her partner bought their house on a Help To Buy scheme in 2014 - it’s due to end next month.
Unfortunately her partner suffered from a major illness and has spent the last 7 months in hospital, he is on the mend now but is unlikely to get back to work in the short term.
Fortunately they took out PPI for the mortgage but this ends in November and need both incomes to pay the mortgage. We wondered it it would be possible to rent out their house and move in with me until they’re back on their feet? The alternative would be for them to sell, which is a real shame.
Their house is a 2 bed new build in a desirable area in Exeter and there are plenty of other similar houses in their estate that are rented out.
If it is possible - can anyone point us into the right direction for guidance for new landlords etc?
Thank you
Hoping for any advice on next steps?
My daughter and her partner bought their house on a Help To Buy scheme in 2014 - it’s due to end next month.
Unfortunately her partner suffered from a major illness and has spent the last 7 months in hospital, he is on the mend now but is unlikely to get back to work in the short term.
Fortunately they took out PPI for the mortgage but this ends in November and need both incomes to pay the mortgage. We wondered it it would be possible to rent out their house and move in with me until they’re back on their feet? The alternative would be for them to sell, which is a real shame.
Their house is a 2 bed new build in a desirable area in Exeter and there are plenty of other similar houses in their estate that are rented out.
If it is possible - can anyone point us into the right direction for guidance for new landlords etc?
Thank you
On the Internet, nobody knows you're a dog.
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Comments
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The terms of help to buy prohibit letting out the property. I’ve never known consent to let be given in regards to help to buy, but I guess it is possible.
They would also need permission of their main mortgage lender to rent the property out.0 -
Thank you - will they be able to rent after the HTB term ends next month?On the Internet, nobody knows you're a dog.0
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There's a set of very thorough guides on here, posted regularly by G_M.
Yes, it's possible.
Is it wise? That's a very different question.
Why would it be "a shame" for them to sell a house they can't afford to keep? If they can't afford to live in it, can they afford to rent it out? What happens if the tenants do a runner leaving unpaid rent and a trashed house? Can they get consent to let on their current mortgage, or remortgage to a BtL loan?0 -
Were they purchased under HTB? It appears the HTB loan would need to be paid off before looking to rent outTheir house is a 2 bed new build in a desirable area in Exeter and there are plenty of other similar houses in their estate that are rented out.
https://www.helptobuyese.org.uk/more-information/frequently-asked-questions
when you say the HTB ends, do you mean the interest free period ends (I assume they don't have the finds to pay it off)Thank you - will they be able to rent after the HTB term ends next month?0 -
You need to crunch the numbers;
Purchase price
Current price
Amount of HTB loan
Current mortgage balance
Likely rental income
Will they be able to afford say 6 months mortgage payments with no rental income?
Do they actually want to be landlords and all the stress that can cause?
May be better to sell and take whatever equity they have built up/value increases and start again once their financial situation improves.0 -
Renting out a house because you can't afford it is rarely a good idea. It can work (if the numbers add up) but it is very high risk. As above, run the numbers - but don't forget tax which is payable even if they don't think they are making any money - and they've likely used up any tax free allowance if already earning.0
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I am a mortgage broker. You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice. Please do not send PMs asking for one-to-one-advice, or representation.0
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Thank you everyone, lots of useful information to consider.
Their 5 year HTB term is up in June. My daughter’s salary could just cover the mortgage on their house but with very little extra. She has discovered that similar houses on her estate are being rented for £400 per month more than their mortgage and the area is very popular, so doesn’t think it would be difficult to rent.On the Internet, nobody knows you're a dog.0 -
Glad to hear your daughters partner is on the mend.
If your daughter wants to rent out the house best thing would be the research all the ins and outs of being a landlord before making any decisions, yes a good agent will do a lot for you but ultimately as landlord it will be the landlords responsibility to ensure everything is complied with, gas cert, deposit protected etc etc
Look very carefully at the numbers before taking the plunge and choose your tenant carefully.... better waiting a few months and finding the right tenant then taking the first who comes along and then having an issue.0
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