In a right muddle!

lou2218

Not a newbie but posting under a different username as I’m worried about being recognised! 

I’m needing to leave a toxic relationship asap. We have an 11 month old. Currently living on partners parents land so no option of me staying put and I do not have family / friends that I could live with. I have a BTL property with no tenant in currently. BTL mortgage expiring in 3 months time. I can renew the BTL mortgage, but would not pass affordability criteria for a residential mortgage. 

How do I make this work for me, our child and our future? Is my only option to sell the BTL property and use equity to rent somewhere? What do I do in the meantime, as the property may take a while to sell? I feel so sad, broken and lost as to my options - please be gentle with me 😔

housebuyer143

In your shoes I would move into the rental and keep paying it. It's not allowed but for the short term they are not going to know as long as the money keeps coming in. It gives you breathing space then to either sell up or think of another option. 

lou2218

housebuyer143 said:

In your shoes I would move into the rental and keep paying it. It's not allowed but for the short term they are not going to know as long as the money keeps coming in. It gives you breathing space then to either sell up or think of another option. 

Thanks for your response. This was my first thought, but how do I get around needing a postal address? I assume I won’t be able to claim UC either way, as I’ll either have rental income if I do rent it out, or won’t be eligible as I won’t be able to declare it as my home if I do live in it. Either way, I’ll struggle to make the mortgage payments now. 

Myci85

If you get a tenant in your BTL, would the rent income be enough to pay rent on somewhere for you and your child to live? Even if for now it's a 1 bed flat, it'll be a safe roof over your head and whilst not ideal longterm, no reason for your baby not to share with you.

Herzlos

I'd move into the empty BTL first, and then figure it out. Have you tried explaining the situation to the bank? There may be some way you can convert it to a residential mortgage, or at least know how long you can stay in the BTL.

tacpot12

lou2218 said:

housebuyer143 said:

In your shoes I would move into the rental and keep paying it. It's not allowed but for the short term they are not going to know as long as the money keeps coming in. It gives you breathing space then to either sell up or think of another option. 

Thanks for your response. This was my first thought, but how do I get around needing a postal address? I assume I won’t be able to claim UC either way, as I’ll either have rental income if I do rent it out, or won’t be eligible as I won’t be able to declare it as my home if I do live in it. Either way, I’ll struggle to make the mortgage payments now. 

I don't see why you wouldn't be able to claim UC if you moved into the BTL property as your home. You won't get help with your rent because you won't be paying any, but I presume the issue is that you can't pay the mortgage unless you have a tenant. You could consider moving in, but having a lodger. Under the Rent-A-Room scheme you are allowed to earn upto £7,500 a year without paying any extra tax, and it is not counted as income for Universal Credit. Although the prospect of sharing your home with a stranger might worry you, by carefully vetting them, you might find it to be beneficial on more than just a financial level. 

If you leave the property empty, UC will treat the BTL property as capital, unless you put it on the market. They should then disregard the value of the property for six months while you try to sell it. During that time, you would get help with your own rental costs via the Housing Element of Universal Credit.

If you find a tenant and give them a tenancy agreement, you won't be able to claim UC if your equity in the property is more than £16,000. 

user1977

lou2218 said:

housebuyer143 said:

In your shoes I would move into the rental and keep paying it. It's not allowed but for the short term they are not going to know as long as the money keeps coming in. It gives you breathing space then to either sell up or think of another option. 

Thanks for your response. This was my first thought, but how do I get around needing a postal address? I assume I won’t be able to claim UC either way, as I’ll either have rental income if I do rent it out, or won’t be eligible as I won’t be able to declare it as my home if I do live in it. Either way, I’ll struggle to make the mortgage payments now. 

Why wouldn’t you be able to declare it as your home? The only party who seems bothered about that is your mortgage lender.

lou2218

user1977 said:

lou2218 said:

housebuyer143 said:

In your shoes I would move into the rental and keep paying it. It's not allowed but for the short term they are not going to know as long as the money keeps coming in. It gives you breathing space then to either sell up or think of another option. 

Thanks for your response. This was my first thought, but how do I get around needing a postal address? I assume I won’t be able to claim UC either way, as I’ll either have rental income if I do rent it out, or won’t be eligible as I won’t be able to declare it as my home if I do live in it. Either way, I’ll struggle to make the mortgage payments now. 

Why wouldn’t you be able to declare it as your home? The only party who seems bothered about that is your mortgage lender.

Because the mortgage lender could see I was living in it and it would go against the terms of my BTL mortgage / would then run the risk of them asking for immediate payment, or switching to a residential mortgage, both of which I couldn’t do?