Help - Ridiculous Temporary Consent to Let rules

iolande

agentvamp wrote: »

However, I failed to mention the key driver to wanting a bigger place - above and beyond the baby - it's the fact that my OH's two young children (5 & 8) come and visit for 2 weekends each month and longer during school holidays, and they currently sleep in the living room on their 'funky air beds'. It gets awfully cramped and noisy!

Oh gosh, that does complicate things. Being the child of divorced parents, I always resented the fact that me and my brother didn't have our own room at Dad's place. It felt like we were just visitors instead of his children.

This housing market sucks - I am in a similar situation as you vis a vis parents not being able to afford to get us onto the housing ladder, whilst friends have been helped on by their parents. I just love it when they give impractical advice but you can save whilst your renting - hmm, not in London! and you have to deal with landlords who can be a bit of an unknown quantity. Or just get a small mortgage - and then what, buy a shoebox?

Good luck with your dilemma, I hope you can find a solution

teabelly

Best LTVs on BTL mortgages are still only 85% so you'd still have to find an extra 10%. New build flats are on average only fetching 75% of their original price at auctions and there are loads of them to choose from so unless your has something special about it then you won't have much luck selling it. Switch the northern rock mortgage to interest only and let the place out. Don't bother with the permission to let as you can't but make sure you pay the mortgage no matter what. Get the right insurance and make sure you pay the correct amount of tax. Within a couple of years prices and reasonable lending levels will have returned. With a new build flat it will probably take about 5 years + to get there as they were over priced to begin with. It mostly depends on your local market though as to how long it will take to be out of negative equity.

Also investigate rental guarantee insurance as you won't be able to afford tenants not to pay. Northwood also do a guaranteed rental scheme which pays you regardless from after the first month you hand the place over to them. If this is enough to cover your costs then consider it as it will be the safest route if you don't have much spare cash.

hedgen

We're currently trying to sell our 1 bed flat. Our baby is now 15 months old, and it's only starting to feel a little too small, plus I'm pregnant, so we'll definitely need more room. We're also looking to make the move from the south up north, and so a 3 bed house, is similar in price at the mo to our 1 bed flat - great! Apart from we can't seem to sell ours despite dropping the price by £12k, we're moving Estate Agents and will drop further in the hope to sell.

Our other option is to rent out, when we went to our lender (C&G through Lloyds TSB) about porting our mortgage if we sold, we mentioned that we may let out if we were unable to sell, the lady said that we should really write them a letter and pay £100 admin, but that we could just rent it out and not tell them. This was from the bank itself! OK, so different banks may be different about this, but maybe you could just rent out if that happens to be the best option.

My advice would be to leave the house on the market, but stay there. If it happens to sell right around the birth of baby, then I'm sure you can be negotiable with dates for actually exchanging. I'm guessing you will want to sell within the next 18 months, why take it off the market?

Generali

I lived in a one bed flat with Mrs Generali when the first Generalissimo came along. We lived there for about 11 months and only moved because the LL kicked us out. It really wasn't a problem.

The baby should sleep in your room for the first six months as, IIRC, it reduces the risks of cot death.

A good rule of thumb is ignore every post Squat_now writes as they are usually inaccurate and unhelpful.

MissMoneypenny

teabelly wrote: »

Don't bother with the permission to let as you can't but make sure you pay the mortgage no matter what.

If you don't get permission from the mortgage lender (who is joint owner of the property) to let out the property and the mortgage lender finds out, then you could be in trouble. Plus without your lenders permission, the tenancy agreement is invalid.
Can you afford to pay the mortgage if you have don't have a tenant for a couple of months a year? Can you afford to do the repairs?

You can live with a baby in a 1 bedroom flat for quite a while, before the baby needs it's own room. I loved having my babies in the same room as I was sleeping in. I come from a big family, so baby clothes use to do the rounds as they never wear out, plus my friends were all having babies at the same time so we use to share baby clothes too. My biggest regret was buying so many new toys as you can get some fantastic toys at car boots/mother and baby clubs sales and now of course, there is freecycle too, for a fraction of the price a new toy costs.

I was talking to someone the other day and she told me that they lived in a 1 bedroom flat until their daughter was 7 years old. They ended up sleeping on a pull out bed in the lounge and their daughter had the bedroom. Not ideal, but it worked for them until they were able to buy a 2 bed house.

N79

I just thought I would offer my opinions on what might be going on here.

Firstly, congratulations on your baby. I wish you a happy and successful preganancy. Please don't ruin it by worrying about house prices!

I do not think Northern Rock's offer is ludicrous. Your mortgage is fairly high risk (95% LTV, new build flat etc). Lending too much without good sized deposits on overpriced properties is exactly why Nothern Rock failed. When you say that Northern Rock are not leaving you with any options I think this is deliberate. They are saying that your mortage is already high risk and they are not willing to let it become even higher risk by allowing you to take on responsibilities for another property.

You do have options:

1. Can you remortgage? However, I believe that most current BTL mortgages require larger deposits than 5%. Ask a good broker.

2. Stay put for a couple of years. While you might like more room, I think we all need to accept that we can not always have what we want. People used to bring up large families in small houses just fine and the idea that children must have their own room is modern rubbish. You have a roof over your head and a wonderful family - everything else is a nice to have.



Finally, many people have given the opinion that you should let the house without teling Northern Rock. I just thought I would sound some notes of caution.

I do not know what the odds are of being caught. While you have put Northern Rock on notice that you might try to let your flat I suspect that the odds are still fairly long. Even those people that I am aware of that have been caught have merely been told by the lenders that the mortgage is being converted to BTL. But this was in easier times.

Just be aware that Northern Rock could use this as a breach of the mortgage and refuse to hold the mortgage any longer. This would force you to remortgage which will be impossible given that you are having to do it because at best you breached your mortgage contract and at worst committing fraud against the previous lender (misrepresenting risk for financial gain = fraud not just breach of contract). This may not happen, I am just warning that it could.

I am not offering an opinion on whether you should do this or not, that depends on your assessment and attitude to risk. Good luck with whatever you decide.

Finally, ignore Squat-now as while I "admire" their determination that their single vision world view is correct, they do seem to like to post these even when the thread is an advice an not a discussion thread!

N79

prudryden

Do not go down the letting path as a novice AND especially without telling your mortgage lender. As mentioned previously in one of the above posts, the lender could ATTEMPT to refuse to hold the mortgage any longer. The stress of the battle could be debilitating. And it could prove to be even more problematic, if the tenant turns out to be less than honourable.

Oh, btw, squat's solution is a bit idiotic.

MarkyMarkD

N79 wrote: »

Lending too much without good sized deposits on overpriced properties is exactly why Nothern Rock failed.

No, it is not why Northern Rock failed.

Northern Rock haven't incurred losses on lending leading them to fail.

They simply ran out of cash due to their borrowing policies.