How does converting to BTL actually work if you're moving abroad

hodd

Evening all
My wife is from overseas. We both lived there in the past and are planning to return permanently in two years. Straightforward so far.
We have a house here which was purchased for £180K, and the current balance is £103K. The original plan was to sell the house, but that would mean cutting ties with the UK, and on a practical note, if my wife died or the situation went belly up overseas, I'd potentially return to the UK homeless. I'd like to explore the possibility of renting the property.
Here goes, now it gets dodgy. I'm a school teacher and had no issue securing employment previously in my wife's country, but I'd be heading over there effectively jobless to start with. I could sort out a job in advance with an employer I guess, but there's enough freelance work over there. I do have a spare £60000 floating about, which equates to ten years of (current residential) mortgage payments at today's rates. 
My worry is that when trying to convert from residential to BLT, the lender will want details of not only current earnings but also where I'm living next. I'd have to say I was heading overseas to be jobless (I'd probably make it sound less bad). 
I've "re-mortgaged" before to take advantage of cheaper residential rates as most people have, and doing this with the same lender was quick and painless. Is it similarly painless to stay with the same lender when converting to BTL?
If it's going to be too much hassle, I'll reluctantly sell the house.

hodd

I do have a little plan. My wife's home country is in Asia. It's not convenient to pop back so often.
I can easily get a job in Europe first and then enquire about converting to BTL. The lender would see where I'd moved to and my source of income. 

K_S

@hodd If you might come back to the UK, you could consider applying for consent to let from your current lender? Once there is a track record of paying tenants and the property is self-financing, you may have options to remortgage to a BTL even as an expat.

hodd

Thanks K_S
I saw that as an option. I just read that a lender might allow a CTL to be converted to a BTL. That'd be nice.
I'm currently with Clydesdale. I got that mortgage whilst as a contractor which was a lot of effort. I think you can tell I'm after an easy way to do this.
I could just ask Clydesdale, but I'd like to do a bit of research first.
K_S, you mentioned CTL. Is that easier to obtain than a BTL? 
How long do CTLs generally last? Can they be extended? (No, I'm not trying to bend rules and extend indefinitely. I think lenders might've thought about that already).
And the ultimate lazy question. When I came to remortgage after the initial two year low rate deal was coming to an end, I stuck with Clydesdale. The mortgage is only £500 a month, and the paperwork to remortgage elsewhere didn't justify the tiny savings. It was so easy. Ideally converting to a BTL with Clydesdale would be almost as easy.

K_S

@Hodd

- Other than the similar sounding acronyms, CTL and BTL are completely different CTL is what you request from a lender when you would like to temporarily let your property that is currently on a residential mortgage.

- CTL policies differ from lender to lender so you'll have to ask Clydesdale

- 'Converting' a residential mortgage to an interest-only BTL mortgage, even if staying with the same lender, will most likely be like taking out a new mortgage. It will almost certainly be nothing like a product-switch that you did at the end of your fixed term.

hodd

Thanks again K_S.
I'm veering towards selling the house at this rate. The scenario of a CTL and then later converting to a BTL sounds nicest but unlikely.
The plan was, of course, to use the rental income to pay the mortgage. If there were issues such as no tenants or tenants not paying, I mentioned the savings which would provide a big cushion for such eventualities, and I would be getting paid in Asia but not a massive amount by UK standards. I'm guessing the problem is the lender will want proof of income (and not from the rental income). 
I mentioned getting a job in Europe first which would probably have enough income to satisfy a BTL lender. Bit of hassle but I've worked in Europe a lot so it's not so daunting.
Any other things I could do? Maybe use some of the savings to reduce the balance?
The CTL option is OK, but I'm probably not returning to the UK, so after so many years I'd have to sell the property anyway (although it would probably be worth more then, at least according to my crystal ball)

silvercar

You are over contemplating things. You could ask for provisional agreement to consent to let now, then you will know where you stand. Just tell your lender that you are temporarily moving abroad for work. You can delay a decision on whether you sell up or go for BTL.

[Deleted User]

You wont need a prove able income if you go down the ctl route.   After 6months of rental proof you become an 'experienced landlord' and some lenders will do expat btl with no income required.

I would do ctl to see how things pan out and then decide if you want to keep it longer term.  Most lenders will allow it no questions if moving abroad for work

hodd

Thanks Deleted_User and silvercar, this is brilliant advice.
A CTL, as well as allowing an intro to being a landlord, would also allow me to get set up in Asia and hopefully have an income which I could prove, or I could sell up a few years later down the line having had a couple of years with the CTL option.
Never say never, but I'm afraid (afraid for first time buyers) house prices going down so I'd probably do OK.
Thanks again. I'll see what Clydesdale have to say.

hodd

Just an update on this, CTL is only allowed (with my existing lender) for up to a year.

From a tenant's point of view, isn't that less than ideal? It's a two-bedroom house so would suit a couple or small family who probably want to be slightly more settled. It alos means I'd rent it furnished as would any tenant want to buy loads of furniture for a 12-month let?

Just thinking aloud.

grumiofoundation

hodd said:

Just an update on this, CTL is only allowed (with my existing lender) for up to a year.

From a tenant's point of view, isn't that less than ideal? It's a two-bedroom house so would suit a couple or small family who probably want to be slightly more settled. It alos means I'd rent it furnished as would any tenant want to buy loads of furniture for a 12-month let?

Just thinking aloud.

But wouldn’t you then convert to BTL after that year? 

in any case even if you suddenly couldn’t remortgage this wouldn’t end the tenancy. 

But you are also aware that if you and tenants sign a 12-month fixed term tenancy agreement that doesn’t mean that they have to leave after 12 months even if you and they don’t sign a new agreement. 

There’s a lot of rules and regs to follow up when you are a landlord. Even if you get an agent to manage you are still financially/legally liable if anything goes wrong. As an overseas landlord you will also need to make sure agent deducts tax or you have to fill in a self assessment yourself.