PistolPete

Hi Guys,

All set to move out to Dubai on the 4th April 2008, and we have hit one major problem.....Renting our house in the UK!!!

Foolishly, some will say, I accepted the offer, handed in my notice, and today we spoke to our mortgage company who will not allow us to rent the house out! :curse::curse:We have appealed!

Does anyone have any tips, hints or advice for two very annoyed people who are looking at their dream move disappearing!

It makes no sense as far as I can see as I will be earning double my UK wage, plus the added bonus of the rent coming in. Their is a shortfall of roughly £300 a month.

I am facing the idea of cancelling the whole move!!

Please, any advice would be appreciated!!

Cheers

Pete

Madam Medusa

why would there be an issue?? we rent our house out and it wasn't a problem, what did the mortgage company say...??

MM, xx

sinderelle

Change your mortgage? mention you might have to just move Lendors

We used Halifax and they allowed us to rent ours out, they said initially for a period of 3 years and they'd review and we might have to pay a commercial interest rate - but they never did

PistolPete

it went to the underwriters and they rejected it!!

Am i right in thinking that we need their permission?


We will get a £4,500 fee if we change!!

sinderelle

you'll probably find on the small print that you're not supposed to sub-let without informing the Lendor

sinderelle

Oh crap

Madam Medusa

yeah, you do need their permission, but i can't see why there is an issue...will ask my hubbie tomorrow and let you know...

MM, xx

Bob

They're kicking a stink because it'll be harder for them to foreclose possibly if you fall behind and aren't in the country...

PistolPete

Thanks guys,

Madam Medusa, if you could that would be awesome!!

Eva

My advice is to (as Sindrelle says) change lenders..........
Seems a bit punitive-are you caught up in negative equity at all?
Your options: leave it empty and pay premuim unoccupied property insurance tariffs; also pay daily gas charges, elecricity.............
Lease it-offset rent against mortgage payments'wear and tear;gardeners.Should make money for you .

Amazing Grace

I cant think why you are having this problem. I would say that a huge amount of expats rent their properties out when going overseas. At the end of the day property is a great investment and if it is all done properly there is no problem and everyone is a winner. I dont know about other countries but most estate agents in the UK have a leasing department within the "shop" as it were. As said before change your lender, maybe this will make your current one sit up and listen. Dont sell your house as it will be harder to get back on to the property ladder when and if you return to UK. Our house is our nest egg for Cyprus when we retire. Good luck

The Dean

This may be a relatively new development (refusing permission, I mean).

Lenders have less money to lend, following the US sub-prime mortgage fiasco that has spilled over to much of the rest of the world (look at all the write-downs the banks announced in their 2007 results).

Also prices - despite vainglorious attempts at denial by desperate estate agents in a few pockets of the UK - are falling. Not crashing, but there is clearly a declining trend. If that continues, or accelerates, repossessions are likely to increase..........

........ and that's where the problems might arise. If for any reason, you default, or there is some other sort of problem that prevents you from meeting your payment obligations, the lender will have TWO issues:

1 - pursue you through legal channels; but also, even if they succeed in repossessing........
2 - evict the residents who MAY NOT be in arrears at all in terms of rental payments to you

If your tenants refuse to move out, the mortgage lenders know they can do nothing to force them, especially if they are up-to-date on their rent. No court will evict good fully-paid-up tenants.

And I'm with the tenants there, and that's what worries your lender.

If prices were rising, I suspect you'd have no problem. This, I'm guessing, is a recent diktat from the head offices of the banks and build-socs.

Amazing Grace

I recently enquired earlier this year about renting out our house and there didn't seem to be any problems at all, having said that we are in a lucky position of only having a very small mortgage on our house which has now gone up in value by 600% so maybe that is why they are happy for us to rent. I think PistolPeter needs to do some more ground work before he leaves if he has time and see what is available. Yes there will be a fee but some mortgage lenders were waiving this fee recently. Good luck

Border Reiver

It is in the small print of almost all domestic mortgages that you need the lenders permission to rent the place out. I've never heard of it being a problem before so maybe it does have something to do with the dip in prices. There must be something in your profile that they don't like- have you taken out the mortgage very recently and is there not much equity in the house?

The argument from the lenders is that once you start renting you are running a business and should have a commercial mortgage, at a higher interest rate of course.

ssuh

Surely you just don't tell them?

So long as the lender is getting his full payments on time - he is none the wiser...and everybody is happy.

If the mortgage payment could ony be supported by tenant income then I can see the issue but if the OP is in full time,and by the sounds of it, better paid employment then........