renting out 2bed council flat 2 years after purchase?

[Deleted User]

purchased a 2 bed flat 2 years back. I got council discount if i sell i will need to pay back part of it within 5 years.

However i would like to rent out my flat in whole. Circumstances have changed and i now live there solo, however i am to move back in with my parents due to cost of living and mental health.

Can i rent out my 2bed flat in whole or have i got restrictions as it is a leasehold?

user1977

We can't read your lease from here - what does it say?

lincroft1710

As well as your lease, you may need to check the terms and conditions of your purchase

TheJP

[Deleted User] said:

purchased a 2 bed flat 2 years back. I got council discount if i sell i will need to pay back part of it within 5 years.

However i would like to rent out my flat in whole. Circumstances have changed and i now live there solo, however i am to move back in with my parents due to cost of living and mental health.

Can i rent out my 2bed flat in whole or have i got restrictions as it is a leasehold?

It would probably be best for you to sell rather than become a landlord. If your mental health isn't in a good place then renting out a flat isn't going to help.

AlexMac

Have a look at the lease; I’ve an ex-council leasehold flat where the local authority, as freeholder clearly, in the lease, ask that any sub-letting be on a minimum term of six months, the usual minimum term of an AST. 

My solicitor pointed this out in their “report on title” as they should usually do. 

However, I didn’t exercise “Right to Buy” as I assume you did, but bought from an existing private leaseholder. So I guess there might just be strings attached to lettings?

One further thought; There is a shortage of social housing here (partly cos of RTB) so I let my flat back to the public sector via a Housing Association (Registered Social Landlord) on a long term basis to house people from the Council Waiting list. Not quite a commercial rent, but they manage everything including ASTs, routine maintenance and obligatory Gas Safety Inspections. 

No voids (I get the rent monthly even if tenants vacate) and no hassle or Agent fees. The HA/RSL insisted I add hard-wired heat and smoke detectors and a bathroom extractor but that cost only a couple of hundred quid. So I’ve been really pleased at the deal over the past 12 years. And lucky timing means I’ve enjoyed great capital growth; though the past decade’s House Price Inflation is unlikely to be replicated in the next ten years?

Something you might consider, if, after having read the sticky, above, you feel uneasy about taking on a Landlord’s responsibilities? Although you will probably have to fill in an annual tax return online, which is a piece of cake!

Either way, good luck. 

theartfullodger

lincroft1710 said:

As well as your lease, you may need to check the terms and conditions of your purchase

exactly....

freesha

If you MH is so bad you need to live with your parents again, is it really a good idea to set up a residential lettings business?

markin

Probably best to just leave it empty and have a trail living at parents home until you get fed up and want your own space back, don't change your address.

_Penny_Dreadful

[Deleted User] said:

purchased a 2 bed flat 2 years back. I got council discount if i sell i will need to pay back part of it within 5 years.

However i would like to rent out my flat in whole. Circumstances have changed and i now live there solo, however i am to move back in with my parents due to cost of living and mental health.

Can i rent out my 2bed flat in whole or have i got restrictions as it is a leasehold?

Somewhat bizarrely there is nothing in the RTB rules that prevent a person from purchasing social housing with a discount and then putting it straight into the private rental sector. You would need to check your lease to see if there are any restrictions to letting the flat out or if you need to seek consent from the freeholder first. If there’s a mortgage secured against the leasehold then you would need to request consent to let from your lender. 

Letting out property is not for the faint hearted. You may wish to use a letting agent but you must do your research and chose wisely. Even when using a letting agent the buck stops with you as the landlord. 

I’m guessing the reason you’d choose to let rather than sell is because selling would involve repaying part of the discount since you’re still within in the initial 5 year period. As it’s a 2-bedroom property have you considered staying put and getting a lodger. The legislation around excluded occupiers (lodger) is a lot less onerous than that for an AST plus the first £7500 is tax free. 

[Deleted User]

user1977 said:

We can't read your lease from here - what does it say?

3.11           Alienation

(a)        Upon any assignment sub-letting or underletting to obtain a direct deed of covenant by the assignee sub-lessee or underlessee with the Landlord to observe and perform the covenants and conditions of this lease and to pay the reasonable legal fees of the Landlord in connection with such assignment sub-letting or underletting.

(b)        In the case of any instrument operating or purporting to assign transfer lease charge discharge dispose of or affect the premises or any part of them or any interest in them or to create assign transfer dispose of or affect any derivative interest in the Term or any charge on the Premises or affecting or occasioning a devolution or transmission

respectively by operation of law to leave such instrument (or in the case of a transfer or charge or discharge of a charge of registered land a certified copy of it) within one calendar month after the date of such instrument or (in the case of a probate of a will or letters of administration) after the date of the grant of the probate or letters of administration as the case may be to (if so required) leave a certified copy at the offices of the solicitors for the time being of the Landlord so that it may be registered and to pay to them a reasonable charge of not less than £40 (Forty Pounds) plus VAT for each such registration.

(c)            Not at any time to assign part only of the demised Premises.