HelsnLee

Just starting to get my house ready to rent out by getting quotes etc! Has anyone rented out their Uk house and could give me some advice:-

1. Do I need to notify my mortgage company that I shall be renting it out?
2. Could they put a spanner in the works?
3. Would this mean I have to change my mortgage deal?
4. How much on top of my mortgage payments and rental company fees should I need eg maintenance insurance (anything I haven't thought of?)

Thank you in advance

Jan n Neil

We looked into this, and found the following basic facts:

1) any rental, whether you are abroad or not, you must tell your mortgage company
2) if you are abroad you should think of using a rental agency to look after your interests
3) you need to declare the potential for rental income on your P85 (query exact number?) the tax form you fill in to tell the Inland Revenue that you are leaving the UK

There will be other things I am not aware of - we looked into renting my house out but decided not to and sold at a loss instead. I'm sure others will be along to tell you more

Jan

Luckybird

Hi HelsnLee,

We have rented our house out in the UK, really wanted to sell but, the market place was really poor, so we took the rental option and hope to sell in the future. Yes, as Jan says you do need to inform your mortgage company as you will need their permission as it is becoming a rental. They could charge you a small annual fee, so it's worthwhile checking to be honest. You shouldn't have to change your mortgage deal - but each one can be different so again worth a ring, our company were really helpful and gave us different options.

We use a rental agency, you do have to pay a percentage of the rent, but, it is worth it for peace of mind as they vet tenants and check the property regularly and deal with any issues first hand. You will need Landlord Insurance, but, it's up to you whether you want to have maintenance insurance as well.

Hope that helps, would just advise that you get different agencies round as the percentage is different with each agency and some provide more services than others. Good luck

Si19761

Same as luckybird here too, we have gone specifically to a buy to let mortgage, the deals are good at the minute. For landlord insurance it is also worth getting the £5k contents insurance as well as this covers things like curtains

Property management is a must but shop around, they are a mixed bag, we have gone with a local estate agent with a good reputation from both landlords and tenants and so far so good.

We also pay for lawn mowing and gardens as we will want to sell our house plus we had lovely neighbours so don't want tenants letting the area down (there are tax implications in NZ after 4 years).

I think we were about a month without tenants so it is worth budgetting for things like that too. We are working on £1k a year for maintenance as we have inbuilt appliances too so hopefully that will keep us sorted.

Good luck

HelsnLee

Thank you all...renting or selling there doesn't seem to be an easy option!
We have only owned our home for 41/2 years and I fear the deposit we worked so hard to save for is now gone as the house prices have slumped, if we were to sell now by the time we pay for fees etc there would be nothing left!
I shall get in contact with mortgage company, we aren't fixed in to mortgage at moment so we could potentially shop around however if they value our house close to what our mortgage is we may be up the creek for a buy to let mortgage! Would they allow me to rent it on the current 'roll on' mortgage I shall have to ring and find out!?!
Definitely going to use an estate agents one local company has guaranteed rental income should it be empty inbetween tennants which is peace of mind
Maintenance wise I'm lucky my family and current neighbours are excellent and I know would do lawns guttering window cleaning so need a budget for electricals, plumbing and insurance.
If we did manage to rent our house what happens then after 4 years? Do you have to sell your house or are there tax implications?
I'm sorry for so many questions we are complete novices when it comes to this kind of thing! All help is much appreciated

MNandMN

You will need to have a gas safety certificate (if there is gas at the house), they are valid for one year, signed off by your plumber - not expensive, we usually pay about £40 and the boiler is serviced at the same time. We pay the management company 8% of the rent and they do 6 monthly checks, collect the rent via direct debit and pay it to us and find new tenants if anyone moves out (at an extra charge I think about £250 for that).

luvwelly

[QUOTE=HelsnLee;9560336] Would they allow me to rent it on the current 'roll on' mortgage I shall have to ring and find out!?!

If we did manage to rent our house what happens then after 4 years? Do you have to sell your house or are there tax implications?

After 4 years you have to declare your UK rental income on your Kiwi tax return which wouldn't necessarily be a big deal. UK tax situation is good though as unless you are renting out for megabucks, your tax free allowance will cover your liability unless you also have lots of other assets left behind in UK to swallow it up.

We had to change mortgage type to 'buy to let' with same lender and also had to get completely different house insurance (I went with Legal and General).
The benefit of using an managing agent beyond the obvious when you are so far away in a different time zone is that they tell you about all the other legal requirements such as Gas and Electrical checks. They also evict tenants for you but you get to pay the bill lol. Make sure you get 'fully managed'.

British Gas do an annual maintenance cover for Landlords which includes the certificates, breakdown etc etc

johnht

One of the main problems of letting our unsold house from our perspective is the minimum tenancy you have to offer (6 months, I think) and that you probably should take the house off the market for, say, the first three months of that. Then you've got to remarket the place.
It seems to me that we'd need to make the decision to let the house for a year or two at least for it to be a sensible option - though I guess the come back to that is that the housing market is so slow that we might have to wait two years to sell in any case
John.

HelsnLee

Thank you everyone for your help! Finally starting to understand our predicament a bit better!

nope no megabucks here or assets!

Shall only have to pay tax on half a years worth of rental income which isn't too daunting!
Have just spoken to mortgage company and they will transfer to a 'consent to let' mortgage without any transfer fees. It is a fixed rate mortgage not a roll on mortgage that we are currently on so interest rate higher but at least it is achievable which is a relief.
The rental income will not cover all insurance maintanace costs etc so we will have to subsidise from NZ
Yes we have decided to rent for a couple of years see how the market is before thinking of selling. We don't have enough time to sell our house before we emigrate and the thought of going and trying to sell whilst tennants are in there just doesn't seem practical or achievable. Will we get tennants that would be happy on a roll on tenancy depending on sale of house...uh not likely! not without discounted rents and I will already be subsidising from NZ and will drain our funds too much!
Hope you get your housing sorted

HelsnLee

Thank you for this we had no idea apparently large fines if not completed!