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Jo*_2
Posts: 116 Forumite
I bought 50% of my flat 13 years ago. I wish I had bought the rest a few years ago, when I first had the opportunity to..
I've had to move away for my job and have been living with a new partner. My flat is unoccupied most of the time, so I'd like to rent it out.
As per all or most SO properties, its written into my lease that I can't sub-let. So my initial thought was to buy the other half then rent it out. However, my mortgage broker says to let it I need a buy to let mortgage on 100% of the current value. The HA and a local estate agent on the other hand, disagree, saying I can just buy the other 50% and request permission from the lender at the same time. The only way I think the latter might have a slim chance of being successful is if I stay with my current lender, who I've been with since I bought the place..?
I'm waiting for a response from a second broker to see if they say the same ie buy to let on 100%. I need to get the right product as the difference in deposit sums is tens of thousands.
Anyway I've just been reading that in exceptional circumstances, HAs will grant permission to sub let for a period of time, despite what it says in the lease. I am happy to request permission. But what if they say no? Then they'll know I'm hardly there!
I'd be grateful for your opinions on both the mortgage issue, and what happens if the HA says no. Thanks ☺
I've had to move away for my job and have been living with a new partner. My flat is unoccupied most of the time, so I'd like to rent it out.
As per all or most SO properties, its written into my lease that I can't sub-let. So my initial thought was to buy the other half then rent it out. However, my mortgage broker says to let it I need a buy to let mortgage on 100% of the current value. The HA and a local estate agent on the other hand, disagree, saying I can just buy the other 50% and request permission from the lender at the same time. The only way I think the latter might have a slim chance of being successful is if I stay with my current lender, who I've been with since I bought the place..?
I'm waiting for a response from a second broker to see if they say the same ie buy to let on 100%. I need to get the right product as the difference in deposit sums is tens of thousands.
Anyway I've just been reading that in exceptional circumstances, HAs will grant permission to sub let for a period of time, despite what it says in the lease. I am happy to request permission. But what if they say no? Then they'll know I'm hardly there!
I'd be grateful for your opinions on both the mortgage issue, and what happens if the HA says no. Thanks ☺
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Comments
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Hi Jo
I had a shared ownership property a couple of years back, got sick and moved home to my parents. I was signed off work and was with them so they could help take care of me. I asked my HA if I could sublet, as I was off work, and living with family and provided evidence from my doctor. They refused. The property remained empty until sold. As far as I was aware this was no problem.
I ended up selling the property.
I can't advise on mortgages, but I imagine if you staircase an existing mortgage, it wouldn't be buy to let so yes you'd need lenders permission to let once you've staircased. I've never let a property so I can't tell you likelihood of this being accepted or if there are instances when it's declined.
Also if a flat in wholly HA building where the HA owns the freehold, worth checking if the lease allows subletting at all?! In fact check this part of the lease even if they don't own the freehold as it is always possible subletting is against the leasehold rules.
Getting a buy to let mortgage on 100% of the property sounds like the suggestion would be to sell the property and buy it yourself, if buying to let it, then I feel like the HA would tell you you couldn't buy it yourself as you wouldn't be living in the property and they'd sell it to someone in need of a shared ownership scheme ahead of you (I could be wrong but from what the mortgage provider is proposing this sounds possible)
Do you have enough equity to consider selling the property and buying a buy to let investment elsewhere?
Good luck !
With regards to the best mortgage, /940 -
Whether or not the HA will allow sub-letting differs between HA's. I have a shared ownership property that I have been renting out for 3 years now with the HA's permission but they will only give 6 months consent at a time, and they have eventually pushed for me to sell the house so it's definitely not a long term solution.
I would be suprised if you could get a residential mortgage on the house whilst asking for consent to let at the same time but there's no reason you couldn't get a residential mortgage, then ask for consent to let after it's all gone through.0 -
When staircasing to 100%, you don't have to remain with the same mortgage lender, you can apply for any mortgage with any lender as it doesn't need to be a 'shared ownership mortgage'. So, the OP can staircase to 100% with a Buy to Let mortgage if they wish and there's nothing the HA can do to stop them - it will be written in the lease that the OP can staircase to 100%.Lurkingtoposting17 wrote: »
Getting a buy to let mortgage on 100% of the property sounds like the suggestion would be to sell the property and buy it yourself, if buying to let it, then I feel like the HA would tell you you couldn't buy it yourself as you wouldn't be living in the property and they'd sell it to someone in need of a shared ownership scheme ahead of you (I could be wrong but from what the mortgage provider is proposing this sounds possible)0 -
So it remained empty - what a waste.Lurkingtoposting17 wrote: »Hi Jo
I asked my HA if I could sublet, as I was off work, and living with family and provided evidence from my doctor. They refused. The property remained empty until sold. As far as I was aware this was no problem.Lurkingtoposting17 wrote: »
Also if a flat in wholly HA building where the HA owns the freehold, worth checking if the lease allows subletting at all?! In fact check this part of the lease even if they don't own the freehold as it is always possible subletting is against the leasehold rules.
The rest of the building is either owned out right or being let out, so i know there'll be no problem eventually in getting permission to let. But i want to be going the right way about it and want to avoid the HA and any lender rejecting my request. I also don't like the idea of putting on record anywhere that its empty most of the time.Lurkingtoposting17 wrote: »
Do you have enough equity to consider selling the property and buying a buy to let investment elsewhere?
I do, and maybe that would be a much simpler option. I know for definite in that case that it would be a buy to let mortgage. I dont want to let go of my flat though and would much rather rent it out to someone else. I just dont know which way to go about it, as its the difference of a lot of money.0 -
I would be suprised if you could get a residential mortgage on the house whilst asking for consent to let at the same time but there's no reason you couldn't get a residential mortgage, then ask for consent to let after it's all gone through.
This is what makes me nervous. I could obtain a mortgage for the other 50% and then say i've had a change of circs straight away. Wouldnt they find that a bit suspicious? And if they were to refuse at that point, i'd be a bit stuck - having gone through lots of admin fees and deposit sums, to be no further along in my plan to let.0 -
When staircasing to 100%, you don't have to remain with the same mortgage lender, you can apply for any mortgage with any lender as it doesn't need to be a 'shared ownership mortgage'. So, the OP can staircase to 100% with a Buy to Let mortgage if they wish and there's nothing the HA can do to stop them - it will be written in the lease that the OP can staircase to 100%.
There's definitely no problem with me staircasing or letting it out once i have 100%, as far as the HA are concerned as all other properties in this building have done one or other or both.
I'm interested when you say i can get a buy to let mortgage for the other half. My broker says i can't do that, and can only do it for 100% of the value.
The broker i emailed last night for a second opinion is going to get back to me later with her thoughts.
I am considering requesting permission from the HA right now with 50% in the meantime. It sounds like i have nothing to lose? I was concerned that they'd say no and expect me to remain there, but they can't enforce that on me, can they? I am there once every 30 days as far as the contents insurance and mortgage is concerned, and i still pay council tax on it. So i assume i'm ok even if the HA turn me down?0 -
I'd be grateful for your opinions on both the mortgage issue, and what happens if the HA says no. Thanks ☺
Hi Jo. Interested in knowing how this went for you? I'm in a similar position in needing permission to sublet from the outset, actually I've already started to sublet as I had to move away, but I'm keen to 'get my house in order' so to speak and figure out how to approach. Thanks!0
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