Little Toot

We are currently living in the UK and are coming out to work in AD in August. We want to rent out our property here, but having looked into changing to a buy to let mortgage, the rate would increase enormously. We are considering not telling our lender that we are going abroad and renting the property. A little bit naughty I know....but can we get away with it?
We would have "Landlords" insurance, but would that be null and void if the lender did not know the situation?
Also what would the penalties be if we were found out?

Any body else in this situation or any one who has any advice about this?

Much appreciated.

mission

my understanding is that if this is your only place of residence ie you have no other property, then renting it out, shouldnt make any difference.

I have my property in London which I have rented out - no issues whatsoever.

just do your tax returns as per normal and you shouldnt encounter any problems.

Brains1983

I know absolutely bugger all about this, so I think it is only fair I inform you of this.



No further comment.

Eva

Do you intend to keep utilities in your name ergo be responsible for gas/electricity/water consumption?
What if your tenant wishes to join the local library, build up a credit history,apply for a store card,vote?
What is your tax status/ Resident/Non Resident?
Whose name will the TV Licence be in?
Confusing isn't it?
Question...if you were a Mortgage Lender and you got a request from an Insurance Broker to assess a claim for a house being burned to the ground....would you pay out with sympathy or look for the slightest reason not to?.Ask Lionheart how it is now(no don't he's been known to take performance enhancing drugs allegedly).
There is an industry of people now employed to invalidate insurance claims from bashed suitcases to burned out homes.Read the small print on your Mortgage Docu's....Read the smallprint on your Building Insurance...
Take the risk like thousands do but know exactly where you will be if you are the unfortunate one who has an arsonist as a tenant.More importantly, I don't know how you will get Lanlord Insurance without them checking for a standard security over the property.
Everything comes with a risk in life and you get nothing for nothing.....

Little Toot

Yes I had thought of these issues.

I haven't checked out what so called Landlords Insurance looks like so not sure what is in the small print. But I suspect they would find a way to slither out of paying up very quickly.

It's just annoying because I have talked to some people out there who simply received permission from their current lender and did not suffer any penalty.

BTW Smallprint on mortgage docs says we have to have their permission to let out the property, but they feel its ok to change the deal for their profit and make us change to BTL!!!

Eva

Yes,they want to cash in and make the deal pay too, they keep it open ended(scenario is parties to morgage are made redundant and can't pay-BUT- can find people who can;tenants-good for them)
Just cover your back at every opportunity.I know it's sickenining that we all know people who fly under the radar and get away with it.You are obviously not that kind of person cos you posted on here and it worries you to do the right thing.

Depending on how much yr mortgage is and who you are going to work for in AD,paying the right insurance,taking the right hit re BTL,you should still be better off in UAE than living& working in UK.

Victor Meldrew

You may well 'get away with' renting and not telling your mortgage company (who is it by the way?). You may also do the same with your insurance company.

But as a previous poster said, do you want to risk your house burning down, or even a lesser problem (roof blown off, major burglary?), and then have your insurance company not pay out? they will take your money quickly, but not pay it out as quickly if you have been lying (by ommision of facts).

Look at Halifax, they have a 'consent to lease' mortgage, more suitable for people temporarily renting their house. I changed to this and it was about 1% higher than my previous mortgage.

Bite the bullet. As long as your rent pays your mortgage, does it matter?

Bijilo123

Its a pity that the mortgage co are taking this view. I've rented my house out twice the first time they increased the monthly payments and on the second time they charged £60 but let the payment stay as it was.

The mortgage of course is a tax deductable as is the horrendously priced landlord insurance so that wil make a difference.

Practically speaking you can only redirect mail for two years so when your third annual mortgage statement is sent out to your home then it will be returned with 'gone away'...what wil you do then?

mission

regarding the building insurance - i dont see what the issue is here, when i renewed my building insurance I informed my insurance company that the house was being rented out, they were fine with it - no problems whatsoever, other than the premium slightly increasing.

Meow

You woudl be in breach of the mortgage conditions, so the lender coudl ask for the loan to be repaid.

Your lender will also want their interest noted on the buildings insurance so will need to be notified if you change that.

Is it really so hard to do things legally?

-

Little Toot

Thanks

Your quite right. I am nervous about "going under the radar".

The problem with doing it properly is that with a new mortgage it will cost us money. The rent would only cover part of the mortgage.

This is a house we bought 3 years ago and is not the ideal letting house so will not bring the highest % returns mortgage/ rent.

Never mind will bite the bullet one way or another!

gfrafters

You dont say who your lender is, we have just moved to UAE and have a mortgage with the Nationwide, all I did was write to them and ask permission, filled a form in and they gave permission, the insurance is also with them. No cost at all. You can also fill in a form from HMRC and claim back the tax on your rent received, providing you are not paying UK tax.

Little Toot

Thanks gfrafters.

It's with the Chesham, a little known building society of only three branches.

They gave us a great mortgage deal 3+ years ago: about 0.5% above base rate so ofcourse it's a great deal for us, but not for them.

I guess they don't want to keep that deal because they make very little money so they are only offering a change to a BTL mortgage.

In fact we are being penalised for having such a great deal. I don't expect we will be able to change to a residential mortgage with another lender and for them to give permission to let

Any other ideas?