Renting out UK property on existing mortgage?
May 20th 2008, 6:18 pm
#46
BE Enthusiast
Joined: Jan 2008
Location: West Lothian
Posts: 685
Re: Renting out UK property on existing mortgage?
I agree, best to shop around for quotes.
As for repairs and such like maybe a trusted family member or friend could arrange any repairs rather than relying on agents, suppose it helps if you have contacts ??
Also the 3 agents we called in ALL said it was a legal requirement to have anything electrical certified - ie the cooker, cooker hood and anything we decide leave in for a tenant BUT this would cost us around £25 per item!!:curse: Again, if you know someone who is in the profession - then that helps!!
Also told we must have smoke alarms fitted - got the local firemen to do mine !!
that was a great summer - firemen, oh firemen!!! Advised that smoke alarms are perfectly fine with battery and do not have to be wired to the mains!!
Sue..........
As for repairs and such like maybe a trusted family member or friend could arrange any repairs rather than relying on agents, suppose it helps if you have contacts ??
Also the 3 agents we called in ALL said it was a legal requirement to have anything electrical certified - ie the cooker, cooker hood and anything we decide leave in for a tenant BUT this would cost us around £25 per item!!:curse: Again, if you know someone who is in the profession - then that helps!!
Also told we must have smoke alarms fitted - got the local firemen to do mine !!
that was a great summer - firemen, oh firemen!!! Advised that smoke alarms are perfectly fine with battery and do not have to be wired to the mains!!Sue..........
May 20th 2008, 6:24 pm
#47
BE Forum Addict
Joined: Apr 2005
Location: Saskatoon, Saskatchewan
Posts: 4,104
Re: Renting out UK property on existing mortgage?
From what I remember the last bubble was heavily localised in the South-East, so if you were outside that area I can certainly see that you could have avoided the worst of the crash. But the current bubble is nation-wide, and the crash will probably be worse outside the South-East this time as wage to price ratios are often much higher.
In addition, the UK economy is in big trouble with bloated government spending, declining North Sea oil, banking bail-outs and, I believe, becoming a net importer of oil and gas for the first time in decades. I can't see the prospects of another boom are very high any time soon.
May 20th 2008, 6:40 pm
#48
BE Forum Addict
Thread Starter
Joined: Sep 2005
Location: Windsor, ON
Posts: 3,374
Re: Renting out UK property on existing mortgage?
In addition, the UK economy is in big trouble with bloated government spending, declining North Sea oil, banking bail-outs and, I believe, becoming a net importer of oil and gas for the first time in decades. I can't see the prospects of another boom are very high any time soon.
Want to buy a house? 
May 20th 2008, 7:05 pm
#50
SUPER MODERATOR
Joined: Dec 2005
Posts: 88,023
Re: Renting out UK property on existing mortgage?
FWIW when we moved to the US in '96 we had every intention of renting our house but I couldn't bare to think of anyone else living in it. So it stood empty for 2 years...although for about a year of that time it was up for sale.
On the up side it was somewhere to stay when we went back to the UK and if things didn't work out here we still had our home to go back to. We lived in a rental for 2 years...I'm glad we did because it gave us time to find out exactly which was the best area for us to live...get our credit rating sorted etc. Like the above poster said...it will all work out for the best.
On the up side it was somewhere to stay when we went back to the UK and if things didn't work out here we still had our home to go back to. We lived in a rental for 2 years...I'm glad we did because it gave us time to find out exactly which was the best area for us to live...get our credit rating sorted etc. Like the above poster said...it will all work out for the best.
May 20th 2008, 7:09 pm
#51
BE Forum Addict
Thread Starter
Joined: Sep 2005
Location: Windsor, ON
Posts: 3,374
Re: Renting out UK property on existing mortgage?
I hope so!
If I could afford to leave it empty and on sale, I'd do so, but the mortgage is just too much to do that and rent in Canada at the same time....
It's just typical of my luck that I manage to get a job offer and then a few weeks later the housing market plummets!
If I could afford to leave it empty and on sale, I'd do so, but the mortgage is just too much to do that and rent in Canada at the same time....
It's just typical of my luck that I manage to get a job offer and then a few weeks later the housing market plummets!
May 20th 2008, 7:11 pm
#52
Joined: Feb 2007
Posts: 3,020
Re: Renting out UK property on existing mortgage?
They're lying. It's not a legal requirement to get them certified - you just need to make sure they're safe. They'll be getting a backhander from their electricians for everything they certify - that's why they want you to do this.
May 21st 2008, 5:52 pm
#53
BE Enthusiast
Joined: Oct 2007
Location: Doomed to be stuck in the West Midlands forever!!!!
Posts: 344
Re: Renting out UK property on existing mortgage?
Who said I would pay £25 for each item, when I have contacts in that profession!!
Sue
May 22nd 2008, 12:36 am
#54
BE Forum Addict
Joined: Feb 2007
Posts: 2,710
Re: Renting out UK property on existing mortgage?
We don't own enough equity in our house to convert to a buy to let mortgage, so we would have to get the bank (HSBC) to agree to let us rent out on our existing mortgage for a period of time - does anyone have any experience of doing this?
We did this easily, through a 'consent to let form', it costs us 0.5% extra interest whilst we have a tenant in.
I've spoken to their call centre and they say it's down to the discretion of the lending branch, so I'll have to go in and see them
Also - other daft questions about renting :-
* What % do letting agents generally charge for acting as the landlord?
Ours charges 10% for fully managed, plus a marketing fee of around £60, plus a fee for each tenant. I think they dod a reasonable amount for their money , especially when compared to estate agents. WE also pay for a rent guarentee insurance, which is 3%
* If your property stands empty for a while, as well as the mortgage, are you liable for paying council tax and utilities (standing charges)?
Ours was empty for nearly 5 months. We paid utilities, but not council tax, you get new 6 months free every time after it has been occupied by tenants but is empty I think.
* Are you more or less likely to get/maintain tenants with a furnished or unfurnished property?
Depands on the market for your type of property. Our agetn said in our bracket unfrunished was by far better as furnished was tricky to let. I think maybe starter homes may be easier to let furnished. Thanks.
May 22nd 2008, 12:39 am
#55
BE Forum Addict
Joined: Feb 2007
Posts: 2,710
Re: Renting out UK property on existing mortgage?
Agree with Bazz!!!! They are lying. You are not required to get PAT testing, ours advise it. You are required to get annual gas checks I believe though. We did get our portable appliances tested, I beleive its £40 for first three inc call out then a wee bit on top for additional. I have to say our agents have been really good about contractors, and I don't feel fleeced.
May 22nd 2008, 12:46 am
#56
BE Forum Addict
Joined: Feb 2007
Posts: 2,710
Re: Renting out UK property on existing mortgage?
Thanks for the replies - seems unfurnished maybe more straightforward, however, I know when we first rented it was a Godsend to have some furniture in the place as we started out with absolutely nothing. Guess I'll have to get some agents round and see what they say.... We're in a market town in Leicestershire.
Bazzzz - did HSBC put any time limit on their consent? i.e. if they only let me do it for 12 months, the housing market could be no different by then and I'll still be in the same situation as I am now!
Bazzzz - did HSBC put any time limit on their consent? i.e. if they only let me do it for 12 months, the housing market could be no different by then and I'll still be in the same situation as I am now!
WE have a limit on each inital contract, we can't sign a contract greater than 12 months , but a tenant could stay longer than that on an extension or rolling extension. Its so that if we default and they have to repossess they can kick the tenants out on a sane timescale I think. We can have any number of consent to lets, but each tenant has to be approved. Failure to get approval would result in a 1.5% penalty. Our agents do an internal/credit check anyway so I would be surprised if we were ever turned down
May 24th 2008, 2:15 am
#57
Forum Regular
Joined: Apr 2008
Posts: 81
Re: Renting out UK property on existing mortgage?
Hi folks
As I reported on another thread, we are in more or less in the same position as the original author, after seeing this thread I wrote to my bank to ask for permission to let, didn't know this was possible so as you can imagine I was astounded when they said yes I will inccur a charge of £100 and be required to fill in a form, this will allow me to rent the place out for 2 years, saves us spending thousands to set up a BTL with an extortionate interest rate.
Just want to say thanks for posting the info, as I said I had no idea you could do this
As I reported on another thread, we are in more or less in the same position as the original author, after seeing this thread I wrote to my bank to ask for permission to let, didn't know this was possible so as you can imagine I was astounded when they said yes
I will inccur a charge of £100 and be required to fill in a form, this will allow me to rent the place out for 2 years, saves us spending thousands to set up a BTL with an extortionate interest rate.Just want to say thanks for posting the info, as I said I had no idea you could do this
May 27th 2008, 10:10 pm
#58
Forum Regular
Joined: Nov 2007
Posts: 90
Re: Renting out UK property on existing mortgage?
Hi folks
As I reported on another thread, we are in more or less in the same position as the original author, after seeing this thread I wrote to my bank to ask for permission to let, didn't know this was possible so as you can imagine I was astounded when they said yes I will inccur a charge of £100 and be required to fill in a form, this will allow me to rent the place out for 2 years, saves us spending thousands to set up a BTL with an extortionate interest rate.
Just want to say thanks for posting the info, as I said I had no idea you could do this
As I reported on another thread, we are in more or less in the same position as the original author, after seeing this thread I wrote to my bank to ask for permission to let, didn't know this was possible so as you can imagine I was astounded when they said yes
I will inccur a charge of £100 and be required to fill in a form, this will allow me to rent the place out for 2 years, saves us spending thousands to set up a BTL with an extortionate interest rate.Just want to say thanks for posting the info, as I said I had no idea you could do this
The banks usually require you to have at least 15% equity before they give a consent to let (which isn't buy to let) - make sure you negotiate the interest rate, they are entitled to up it form the standard residential rate but if you persist they may not.
10% plus VAT seems about normal for managed service, but remember contract fees, inventories and any incidentals. On a 12 month tenancy you will probably realize 75-80% of the rent after incidentals and fees are paid.
The big kicker though is that the rent earned must cover at least 110% of the mortgage payment after fees for most banks to grant a consent to let.
COUNCIL TAX - If the house is empty you are exempt for 6 months, you pay after that. Once the tenant moves in they become liable, when they move out the six month clock starts again.
May 28th 2008, 5:51 am
#59
BE Forum Addict
Thread Starter
Joined: Sep 2005
Location: Windsor, ON
Posts: 3,374
Re: Renting out UK property on existing mortgage?
I've done something similar recently.
The banks usually require you to have at least 15% equity before they give a consent to let (which isn't buy to let) - make sure you negotiate the interest rate, they are entitled to up it form the standard residential rate but if you persist they may not.
10% plus VAT seems about normal for managed service, but remember contract fees, inventories and any incidentals. On a 12 month tenancy you will probably realize 75-80% of the rent after incidentals and fees are paid.
The big kicker though is that the rent earned must cover at least 110% of the mortgage payment after fees for most banks to grant a consent to let.
COUNCIL TAX - If the house is empty you are exempt for 6 months, you pay after that. Once the tenant moves in they become liable, when they move out the six month clock starts again.
The banks usually require you to have at least 15% equity before they give a consent to let (which isn't buy to let) - make sure you negotiate the interest rate, they are entitled to up it form the standard residential rate but if you persist they may not.
10% plus VAT seems about normal for managed service, but remember contract fees, inventories and any incidentals. On a 12 month tenancy you will probably realize 75-80% of the rent after incidentals and fees are paid.
The big kicker though is that the rent earned must cover at least 110% of the mortgage payment after fees for most banks to grant a consent to let.
COUNCIL TAX - If the house is empty you are exempt for 6 months, you pay after that. Once the tenant moves in they become liable, when they move out the six month clock starts again.
Got an appointment with the bank tomorrow, if they say as per above, I'm screwed basically
May 28th 2008, 1:56 pm
#60
Forum Regular
Joined: Nov 2007
Posts: 90
Re: Renting out UK property on existing mortgage?
Let us know how you get on