Stuck in the help to buy trap.

Slithery

Would your ex have to pay tax on his 50% share of the rental income?

[Deleted User]

SophieHull said:

GDB2222 said:

I think that renting the flat out is just kicking the can down the road, to some extent. Is there any real hope that the value will increase in say one or two years? Otherwise, are you planning to be landlords for years and years?  

There's a 1 bed house up for rent at £425 pcm nearby. I assume that your flat above a bar would go for less. Is letting really a viable proposition, anyway? 

I notice lots of really nice furniture in the current sale listing. Are you proposing to leave that there for a letting? 

Strangely, we've asked several agents on the rental value and they all say around the £500 pcm Mark. I know at one point the one next door was £450 pcm and the current tenants there have had a look in ours and say they wanted ours when they were looking and we're upset to find it was actually the one they got. Not sure how they would think they were getting ours since it's not up for rent but that's just something I noted the guy said.
I'm answer to your other question, yes. We would rent it out through the temporary basis until we can pay off help to buy. We've estimated no more than a year to save (living with parents so cheap rent, not ideal, but needs must). Once we've removed the ball and chain we will have enough equity to change to a buy to let mortgage, or if we feel it is self sustaining enough leave it as it is so that it will just get paid off over time. Then we have something to sell if things go south, or a pension boost, even if we have to sell it cheapish. 

If prospective buyers can’t get a mortgage to buy the property then you’re not going to be able to secure a BTL mortgage to the property either. As a joint owner your ex will be entitled to half (assuming you are joint tenants or tenants in common with a 50/50) of the rental income. 

[Deleted User]

SophieHull said:

Lover_of_Lycra said:

SophieHull said:

GDB2222 said:

I think that renting the flat out is just kicking the can down the road, to some extent. Is there any real hope that the value will increase in say one or two years? Otherwise, are you planning to be landlords for years and years?  

There's a 1 bed house up for rent at £425 pcm nearby. I assume that your flat above a bar would go for less. Is letting really a viable proposition, anyway? 

I notice lots of really nice furniture in the current sale listing. Are you proposing to leave that there for a letting? 

Strangely, we've asked several agents on the rental value and they all say around the £500 pcm Mark. I know at one point the one next door was £450 pcm and the current tenants there have had a look in ours and say they wanted ours when they were looking and we're upset to find it was actually the one they got. Not sure how they would think they were getting ours since it's not up for rent but that's just something I noted the guy said.
I'm answer to your other question, yes. We would rent it out through the temporary basis until we can pay off help to buy. We've estimated no more than a year to save (living with parents so cheap rent, not ideal, but needs must). Once we've removed the ball and chain we will have enough equity to change to a buy to let mortgage, or if we feel it is self sustaining enough leave it as it is so that it will just get paid off over time. Then we have something to sell if things go south, or a pension boost, even if we have to sell it cheapish. 

If prospective buyers can’t get a mortgage to buy the property then you’re not going to be able to secure a BTL mortgage to the property either. As a joint owner your ex will be entitled to half (assuming you are joint tenants or tenants in common with a 50/50) of the rental income. 

We are not too worried about the ex. He has signed many pieces of paper work to give up his share in the property. He is aware of the situation and signs anything we need without any fuss. As for the buy to let, I know what you mean. If that is the case we would have to just leave it on the residential with consent to let or just sell it. At least then there would be a little bit of equity that a tenant has paid for us. We are back and forth all the time about whether to rent it or not but tens of thousands of pound has been put in to the property (6 years mortgage payments + the deposit). So to then have to pay another £2-3000 for someone to take it off us just seems a complete waste. It's a very difficult decision.

Consent to let isn't granted indefinitely.  In terms of allowable expenses for rental income the capital repayment portion of the mortgage payment is not an allowable expense so even if the rent just covers the mortgage payment you could find you are still making a taxable profit.  The same goes for your ex and he would need to declare it to HMRC.

Honestly, although you think paying another £2000 - £3000 to be rid of the property is a waste I think you're into the realm of diminishing returns.  For the sake of a couple of thousand I would just want to be shot of the property so I could start moving forward with my life. Would it help to think of the situation as being similar to renting for the last 6 years?  Sure you haven't made a profit but you did have the benefit of a roof over your head the same as a tenant.

anselld

SophieHull said:

I bought a property using the help to buy scheme and with no knowledge of any planning a bar moved in underneath my flat 

How can a bar move in without planning?  It is a change of use which needs consent.

Has it been reported to planning and why have they not take enforcement action?

getmore4less

Planning was granted April 2017.

https://www.hullcc.gov.uk/padcbc/publicaccess-live/search.do?action=simple&searchType=Application

17/00262/FULL | Change of use to unit B from A1 Class Use to A3 Class Use, Unit C from A2 Class use to A3 Class Use. The sub-division of Unit D to form two units, Unit D1 to remain A1 Class use & Unit D2 to have change of use from A1 Class use to A2 Class Use. | Village Green Way Kingswood Part Of Local Centre Kingston Upon Hull HU7 3DR

I think the OP flat is over Unit C (my bold)

Can't see any objections to the planning from the residents living over the commercial units
in another post OP seems to have been unaware till 2018 when they planned to sell that this was happening
https://forums.moneysavingexpert.com/discussion/6165605/help-to-buy-redemption

GDB2222

If it is any consolation, there’s almost nothing that you can say that makes any difference to the planning outcome.

GDB2222

SophieHull said:

GDB2222 said:

If you let it with that furniture in, the furniture will get wrecked. Are you okay with that?

If you can let at £500 a month, you should get around £3k a year after expenses. I guess that would cover the interest on the mortgage? 

There would no furniture in it. We would take everything. The mortgage would be about £250 that includes interest and principle. The consent to let is still a residential mortgage but with +1% interest. There would be no tax to pay until my husband is on the mortgage. 

Unfortunately, both you and your ex will have to complete tax returns each year whilst you are renting the house out. There’s a cost to that, too. 

SophieHull

Okay. Well thank you everyone for your input. Even if it's mostly what we didn't want to hear. Looks like we've hit yet another wall. Feel like we've tried everything it's like a prison that we are being forced to pay to live in. I think if it was 2 bedrooms we would just persevere until we could pay off help to buy but since it's just one it is literally putting our lives on pause. 

getmore4less

SophieHull said:

getmore4less said:

Planning was granted April 2017.

https://www.hullcc.gov.uk/padcbc/publicaccess-live/search.do?action=simple&searchType=Application

17/00262/FULL | Change of use to unit B from A1 Class Use to A3 Class Use, Unit C from A2 Class use to A3 Class Use. The sub-division of Unit D to form two units, Unit D1 to remain A1 Class use & Unit D2 to have change of use from A1 Class use to A2 Class Use. | Village Green Way Kingswood Part Of Local Centre Kingston Upon Hull HU7 3DR

I think the OP flat is over Unit C (my bold)

Can't see any objections to the planning from the residents living over the commercial units
in another post OP seems to have been unaware till 2018 when they planned to sell that this was happening
https://forums.moneysavingexpert.com/discussion/6165605/help-to-buy-redemption

That is correct. We first sold the house in August 2018 for £90000. When their surveyor came in September 2018 they had started the building works that same week. We are told they put a little sticker on a lamp post outside. That is aparently enough to inform residents that it is happening and one of our pass times just doesn't happen to be reading lamp posts unfortunately. 

They are not little stickers they are A4 sheets(Yellow) attached to the posts.
There were 2 of them (photos of them in the planning app)
Looks like one was on the post right outside the EA
the other on the end of the  green 

For future reference wherever you live or walk always check a planning notices when you see them.

silvercar

A friend had a help to buy flat bought with her ex and managed to transfer the property into her name (and possibly the name of her new partner). She had to get agreement of the HTB people and her mortgage lender, but it wasn’t a massive problem. I think the costs were the legal fees and a valuation. Effectively a new mortgage and redeeming the old one, but the HTB wasn’t a great issue.