Should I let out my house?

DebCol

Hi - I have been living with family since COVID restrictions hit us all, so my house has been relatively empty. I’m thinking about letting it out now for 1-3 years to help pay my mortgage back earlier. Are there any pitfalls I should think of?
I know I need to get ‘permission to let’ from mortgage lender, and will have to start doing tax self assessments (not sure what that will cost me yet), is there anything else to think of? Thanks

[Deleted User]

DebCol said:

Hi - I have been living with family since COVID restrictions hit us all, so my house has been relatively empty. I’m thinking about letting it out now for 1-3 years to help pay my mortgage back earlier. Are there any pitfalls I should think of?
I know I need to get ‘permission to let’ from mortgage lender, and will have to start doing tax self assessments (not sure what that will cost me yet), is there anything else to think of? Thanks

There’s lots to think of when it comes to letting property. If the property is in England or Wales the sticky about Tenancies in England and Wales at the top of the board is a good starter for ten. 

lookstraightahead

Think of letting a property in the same way as wanting to change career. So you have to train and you are effectively running your own business. 

If you want to do that, go for it. Study hard, don't expect to make a profit in the early days, and be a good company owner. 

YellowCarBlueCar

You'll need to do a bit of research by the sound of it.
At the very least you'll need a gas safety certificate and an EICR (electrical safety check).  Depending on how old your electrics are this may also highlight areas that need addressing before you can let.

Maybe start with
https://www.gov.uk/renting-out-a-property

But there are plenty more resources online if you google for 'uk landlord checklist' or similar.

MalMonroe

If it were me, I'd just sell it. I know there's a temptation to hang on to property because - certainly when I was much younger anyway - property was thought of a good solid investment - and it really was. These days, not so much.

I've heard such horror stories from people who have let out properties that I wouldn't even consider it. A great idea in theory but - one example - my cousin and her family went to live overseas for two years and rented out their property since they knew they'd be returning to the UK to live. First problem - when the two years were over the tenants wouldn't budge. Even though the tenancy agreement had expired. Second problem, because their agreement had expired they thought that meant they could live rent-free. My cousin and family - two adults, two children, had to live with relatives in overcrowded conditions for 8 months. When they DID eventually - after having appealed to courts at a cost to my cousin - get rid of tenants, the house they moved back into was a far cry from the house they'd left. It cost them two or three thousand pounds to get the place repaired and cleaned, not to mention extra for the furniture that had been ruined. Altogether, they lost £6k and swore never again.

I know that not every tenant is like that but also when you are a landlord it's a great responsibity.

If you sell, you can pay back the mortgage, maybe make a profit too - and then you'll be free of the extra encumbrance of property as well as debt.

Of course, this is entirely my own opinion but I think that being a landlord is more of a headache than it's worth. 

AdrianC

DebCol said:

I have been living with family since COVID restrictions hit us all, so my house has been relatively empty. I’m thinking about letting it out now for 1-3 years to help pay my mortgage back earlier.

If the reason for moving out was "covid restrictions", why not just move back in now that the restrictions are about to be lifted?

Are there any pitfalls I should think of?

MANY.

I know I need to get ‘permission to let’ from mortgage lender

...or remortgage onto a BtL mortgage.

and will have to start doing tax self assessments (not sure what that will cost me yet)

Self-assessment tax returns don't cost anything.

is there anything else to think of?

An absolute truckload of things... Let's start with you showing us the basic numbers...

Ditzy_Mitzy

MalMonroe said:

If it were me, I'd just sell it. I know there's a temptation to hang on to property because - certainly when I was much younger anyway - property was thought of a good solid investment - and it really was. These days, not so much.

I've heard such horror stories from people who have let out properties that I wouldn't even consider it. A great idea in theory but - one example - my cousin and her family went to live overseas for two years and rented out their property since they knew they'd be returning to the UK to live. First problem - when the two years were over the tenants wouldn't budge. Even though the tenancy agreement had expired. Second problem, because their agreement had expired they thought that meant they could live rent-free. My cousin and family - two adults, two children, had to live with relatives in overcrowded conditions for 8 months. When they DID eventually - after having appealed to courts at a cost to my cousin - get rid of tenants, the house they moved back into was a far cry from the house they'd left. It cost them two or three thousand pounds to get the place repaired and cleaned, not to mention extra for the furniture that had been ruined. Altogether, they lost £6k and swore never again.

I know that not every tenant is like that but also when you are a landlord it's a great responsibity.

If you sell, you can pay back the mortgage, maybe make a profit too - and then you'll be free of the extra encumbrance of property as well as debt.

Of course, this is entirely my own opinion but I think that being a landlord is more of a headache than it's worth. 

That's as maybe, but it's also possible to get a trouble-free tenant and let a place for years without doing any work at all.  I'm in that position.  I use an agent, which costs, and don't make a profit but it does cover the mortgage.  In the long term it makes financial sense.  Tax returns are straightforward, once one gains access to the Government Gateway, and what you pay is dependant on how much you earn.  If you aren't making much profit you won't pay much, or any, tax.  
Charging slightly below market encourages loyalty from the tenant, loyalty fosters a desire to look after the place.  Do you want to live there again?  I have no real desire to live in my let, which perhaps makes things easier.  

pluto261

Approach it with the attitude that you're getting a part-time job, not just signing a few forms to make money start magically appearing in your bank account. You should make sure you know all of your responsibilities and have the time and money to meet them. You also need to fully understand that once you rent your house out, it is no longer your house, and there are plenty of risks associated with letting out a property (covered elsewhere in the thread).

The world has more than enough landlords who don't get gas safety certificates or protect their tenant's deposits because "I didn't know I was supposed to," or who get precious about what the tenant is doing with "their" house and feel they have the right to show up at any time and let themselves in, or ignore urgent repair requests because they don't want to deal with them. If you're not serious about committing to being a landlord and everything that goes with the role, then it would be better to just sell the house and buy another one when you're ready.

Scotbot

If you have a decent tenant and a reasonably modern property then it will be fine but if you get someone who doesn't pay the rent then it will be a nightmare. Evictions take up to a year,  a year with no rent coming in

Apart from gas and electricity safety checks you have to maintain it to  a higher standard than you might if you lived in it, tenants are paying for the privilege and expect even minor repairs to be done promptly. Do you have family who can fix things or will you have to pay someone? Wear and tear will cost you to fix, tenants are not expected to pay for normal wear and tear.

Generally speaking it will cost you more to maintain than if you lived in it. Financially only worth doing if you expect prices to rise over tge next few years and I think you may be a year too  late on that one