How to rent my flat?

mcls

Good evening,


I have read this forum a lot, and as there are so many good advises, I am posting to get an idea how to deal with the situation I am in.


I bought a flat with a residential mortgage 4 years ago, I lived in it for 2 years and moved overseas 2 years ago. I have kept the flat and kept it empty since then, with me going back there every few months. I have decided that I can't keep paying for this flat being pretty much empty forever, and as such, I want to rent it out. I love this flat and would love to go back there one day, maybe when I retire, so I really don't want to sell it.


Here is the issue : I have a residential mortgage, live and work abroad, Consent to Let seems only to be granted if planning to return within 1 or 2 years, and I am not sure I can gain a BTL mortgage without being a UK resident. Even if I can, I don't have the LTV necessary, and the rent wouldn't be much more than my mortgage. My salary is good but paid in Euros, so I am not sure they would take that into account.


My options are :
- asking my lender with the risk that they refuse CTL and BTL and I would be stuck
- letting it without asking the lender, but it seems that it is not a good idea
- any other option you might think of?


Anyone has any idea of how to deal with this kind of situation or knows any BTL lender for someone living and working abroad?


Thank you.


Best regards,
Matt

Comms69

mcls wrote: »

Good evening,


I have read this forum a lot, and as there are so many good advises, I am posting to get an idea how to deal with the situation I am in.


I bought a flat with a residential mortgage 4 years ago, I lived in it for 2 years and moved overseas 2 years ago. I have kept the flat and kept it empty since then, with me going back there every few months. I have decided that I can't keep paying for this flat being pretty much empty forever, and as such, I want to rent it out. I love this flat and would love to go back there one day, maybe when I retire, so I really don't want to sell it.


Here is the issue : I have a residential mortgage, live and work abroad, Consent to Let seems only to be granted if planning to return within 1 or 2 years, and I am not sure I can gain a BTL mortgage without being a UK resident. Even if I can, I don't have the LTV necessary, and the rent wouldn't be much more than my mortgage. My salary is good but paid in Euros, so I am not sure they would take that into account.


My options are :
- asking my lender with the risk that they refuse CTL and BTL and I would be stuck
- letting it without asking the lender, but it seems that it is not a good idea
- any other option you might think of?


Anyone has any idea of how to deal with this kind of situation or knows any BTL lender for someone living and working abroad?


Thank you.


Best regards,
Matt

Option 1. CTL, try it for 12 months and see if it's manageable.


Also read the sticky on the main page

G_M

mcls wrote: »

....... I love this flat and would love to go back there one day, maybe when I retire, so I really don't want to sell it.
Uh oh! Emotional attachment. Not good!


Here is the issue : I have a residential mortgage, live and work abroad, Consent to Let seems only to be granted if planning to return within 1 or 2 years,

Ask - only way to find out.

and I am not sure I can gain a BTL mortgage without being a UK resident.
see a broker.

Even if I can, I don't have the LTV necessary, and the rent wouldn't be much more than my mortgage. My salary is good but paid in Euros, so I am not sure they would take that into account.
oops!

My options are :
- asking my lender with the risk that they refuse CTL and BTL and I would be stuck
- letting it without asking the lender, but it seems that it is not a good idea
- any other option you might think of?
Best regards,
Matt

Sell. Invest the money. When you come ack (if you come back) buy a new property.

mcls

Why is it not good to have emotional attachment? I didn't buy this flat to let it, but to live in it. Just life has made it this way. But, yes, I am attached to this flat and would like to live here again one day.


CTL is a good option, although it seems arbitrary whether they grant it or not. I will talk with brokers about BTL but it doesn't seem like a good idea at the moment.

Another option would be to wait a few years and go there from time to time, it would probably be a waste of money, but I could keep it and I could afford that. In a few years, I could do BTL with the LTV which would be better.


Otherwise, selling the flat would be the most logical option I guess, but I would have a hard time doing that...

So I am a bit lost in what to do...

[Deleted User]

How would you feel if the tenants didn’t treat the property as well as you would like? I’m not talking about them trashing the place just not being as careful as perhaps you would be given your emotional attachment to the property. The odd knock and spill here and there.

Socajam

I would not sell because you have no idea what is down the road say 5 or 12 months from now.

I have a residential mortgage, live and work abroad, Consent to Let seems only to be granted if planning to return within 1 or 2 years

I would approach the lender and let him know that I plan on returning to the UK within the next 2 years from your job abroad.
Hopefully by then you should be able to obtain a BTL.
On a different note, do not give up your bank account and CC because of the difficult of obtaining credit on your return.

mcls

I am aware that they will not take care of the property like I did, but I accept that. I can always renovate it one day, and even without that, it's a risk that I am willing to take.


Thank you for your advise, I will try to get Consent to Let, that would make everything way simpler. Hopefully I get it, otherwise I am back to square one.

AdrianC

Let's go back a step - what's so special about THIS flat? How is it different to any other flat in the same building or the same area...?

You're talking about setting up a business in a country you don't live in. A business that has considerable political movement against it, and which has various financial hurdles and downsides. A business that you aren't even sure you can get the necessary start-up capital in place for.

I know it's not your primary aim here, but have you run the numbers to see if letting the property is actually going to be profitable? You say the rent will barely cover the mortgage - so what IS the raw yield, taking into account management fees and how much are you accounting for voids/damages/maintenance?

mcls

This flat is special for me in the sense that I lived there, I like the area, the view, how bright it is... I am sure there are other flats I could like, but as I am living overseas for now, it would make sense to keep it and to return there one day. And if not, to keep it as an investment. If I was to sell it and to buy again later, I would not only lose a lot of money in the operation, but it just wouldn't be the same.



Now, business-wise, the flat would rent out for around 1200 a month, the residential mortgage is 1000 at the moment, so I actually would get a bit more, however, I would also need to subtract agency fees (fully managed), service charge, and repairs in the long term. So, yes I would be out of my pocket, but it would still constitute a capital down the line.


You're right, I am a bit short for the start-up capital, current LTV is about 85% and I would need 75% for a buy to let mortgage. However, I would have no problem in the long term as my salary is enough to cover my current living place plus this apartment, and I can still live comfortably. That's why I have kept it for 2 years while not living there. It just doesn't make sense to keep it empty, neither for me, neither for people looking for a place to rent. I would also feel better knowing that some people are there all the time, and even if that creates some maintenance/damage fees, having an empty flat is not much better, and I have other fees like council tax ...


Of course, there is the last option to sell it, but I would like to explore the possibilities to keep it first, and only if this is not possible then I will sell.

hazyjo

mcls wrote: »

Now, business-wise, the flat would rent out for around 1200 a month, the residential mortgage is 1000 at the moment, so I actually would get a bit more, however, I would also need to subtract agency fees (fully managed), service charge, and repairs in the long term. So, yes I would be out of my pocket, but it would still constitute a capital down the line.

Blimey, that's way too tight. You'll be losing money by the time you take into account fees, extra BTL mortgage %, mortgage interest, repairs, risk, maintenance, etc.


I'm in the 'sell it' camp I'm afraid!

AdrianC

mcls wrote: »

This flat is special for me in the sense that I lived there, I like the area, the view, how bright it is... I am sure there are other flats I could like, but as I am living overseas for now, it would make sense to keep it and to return there one day.

Sell it.

And if not, to keep it as an investment. If I was to sell it and to buy again later, I would not only lose a lot of money in the operation, but it just wouldn't be the same.

So you're mixing sentiment with a gamble on future house prices...

Now, business-wise, the flat would rent out for around 1200 a month, the residential mortgage is 1000 at the moment, so I actually would get a bit more, however, I would also need to subtract agency fees (fully managed), service charge, and repairs in the long term. So, yes I would be out of my pocket, but it would still constitute a capital down the line.

Don't forget that mortgage capital repayments are outside claimable expenditure for income tax, and interest payments are restricted. So add a chunk of UK income tax (plus, of course, the requirement for PAYE) on to that.

At a rough guess, I'd say you'll end up subsidising your tenants by about £4k/year. And that's at residential mortgage rates, not BtL. Before interest rates start to rise.

You're right, I am a bit short for the start-up capital, current LTV is about 85% and I would need 75% for a buy to let mortgage.

So it's not even much of your money that you're "investing" in this flat...