Jo-Chris

We are also with Nationwide and they have allowed us to rent out our property on our 'normal' mortgage for 3 years, after 3 years they will expect us to pay the extra 1.5%, change to a buy-to-let mortgage or leave Nationwide. I seem to remember we were one of the last people to get this '3year allowance' and they have now tightened it to 6 months like yours

Maybe worth asking someone else at a Nationwide branch or call their call centre (like we did) and see if you get a different answer/deal??

jmh

I'll give them another call in a month or two. I'm not too concerned as the mortgage amount is low and the interest would only rise to 4%. Makes it worthwhile making some extra payments though. Thanks for the feedback.

londonescapee

Yikes yes we got stung with this by Skipton - there wasn't enough equity in our property to switch from residential to buy to let. Apparently the only thing they do is increase the interest rate if they find out you have been renting it without the right type of mortgage which is a) rather expensive and b) going into shaky ground in terms of insurance as I understand it. We switched to Natwest at the height of when banks weren't giving out anything (or is that still the case 18 months later ). Natwest were great with us though.

Cape Blue

The key is to get an additional "landlords" insurance so that the property is covered - probably going to cost in the GBP20-40 pcm, which is often a lot less than the extra 1.5% if you tell the lender.

jmh

Yes, you certainly need to get the right insurance policy.

I was wondering what would happen if I forgot to fill in the letting consent form for the mortgage company.

janiejones

Just to chime in with what others are saying about agencies. We've got the house on the market, but if it doesn't sell by next month, we're going to rent it. We've found an agency that pay a guaranteed income to us, even if there's no tenant. What they pay is below the market value rent, but it covers the mortgage, and means that we won't have to pay as much income tax on it. They're a national chain of rental agents.

annabel1

Hi janie, were going to rent our house too so we can get out to NZ next year. Which agent are you planning to use if you don't mind me asking ?

JAJ

In a free market, anything will sell provided it is priced realistically - including your house.


How are the agency making money on the deal if they are paying you a rent if there's no tenant?

jmh

A market dominated by sellers drives prices down. If you have to sell in a sellers market then you make a loss, or at least less of a profit. If you don't have to sell, you wait until the market improves. There seems to be a suggestion that current house sellers are somehow 'unrealistic' or greedy if their house doesn't sell right away. Why are people selling houses any different from other people selling in a any other market? Are people selling produce in the local market greedy because they are trying to get the best price they can for their products? Are retailers greedy because they put a mark up on the goods in their shop? No. And yet when people try to do likewise and get a good price for their property they are labelled unrealistic and greedy.

They are in a sellers market and if they don't want to make a loss on their property they would be wise to hold off until there are more buyers in the market. Fortunately, unlike fruit and vegetables which have a limited shelf life, a house will be saleable for quite a few years, by which time people will start to feel more confident about getting mortgages and buying properties.

I was offered guaranteed rent as well. The agency offers it when they know they will be able to fill the property. I doubt the agency offers the same guarantee nationwide as some areas will be more difficult to let than others. There were other reasons why I chose my agent over this one, but if one agent is offering it in your area chances are there is a good confidence level that it will not be standing empty for long even if you use a different agent. I would say that if your agent is that confident about getting tenants in then it is a popular place to live which might bode well for future price rises when the market gets moving again.

LukeandJo

We plan on renting our house out and have spoken to our mortgage provider about consent to lease etc.

How you people are covering the mortgage cost with your tenant rent fee is beyond me...are you sure your mortgage provider are aware. We will have a short fall that we will need to make up.
We won't be on a buy-to-let, more a consent to lease rent rate, but still more expensive!

We need to look into this non-resident landlord stuff, but we won't be making any money on the house????

The housing rental side of things is a nightmare... give me a NZI application any day!

Oh... we are planning to move out for 1st Jan, busy xmas!!!

jmh

To be honest if the rent doesn't cover the mortgage I think you are taking a bigger risk. You may have periods with no tenants, and you will almost certainly have repairs to pay for. I hope you have an emergency fund to cover these eventualities. I'm guessing you are paying for accomodation in NZ too, so you won't have much money to spare if something goes wrong. Sorry to sound negative. I guess you've crunched the numbers and know your own financial situation.

Gail5

Thanks for all your comments. Our house is for sale with Reeds Rains and if we do rent it out, we thought we'd get them to manage the rental, so it's for sale or let. Some have mentioned letting agents - do we go with a letting agent or should we have the estate agent manage both the rental and listing it to sell? Is anyone else doing that? What's best?

Agree with you there LukeandJo - give me a NZI application any day! Aaaaarrrrrrrhhhhh!!!!!!!

faye_h

We rent out our little flat in North London. Unfortunately we bought just before the market crashed at 100% mortgage so now the property is worth less than we owe on the mortgage!

On the 2nd tenant now after having an awful first tenant. He broke numerous clauses in the contract and then stopped paying the rent forcing us to evict him and costing us lots of money in legal fees, hundreds of phone calls to our mortgage company, solicitor and tracing company.

We still haven't recovered the money he owes us 6 months later but we aren't giving up and have just asked another tracing agent to track him down (apparently we have up to 6 years to enforce the county court judgement on him and we will keep trynig until we find him or the 6 years are up!!)

We now have a good tenant and are looking into landlords insurance - can anyone recommend a company for this? Don't want the same to happen again!

janiejones

Sorry all, I haven't been on in a while, and the notification went to my spam folder. We're using a company called Northwood, they've offered us a fixed amount for a year. What we get will be less than the market rent, but by putting the mortgage onto interest only while it's being rented, the rent offered will cover the interest payments, and leave some for capital repayment at the end.

The scheme does come with some conditions, this agency have requested that we paint a number of the rooms magnolia, so to increase the chance of letting it, whereas other agencies that quoted weren't bothered about the decor.

We have a relatively low mortgage anyway (been in the house a long time and never moved) so this is the least risky way for us to let the property. We won't make a profit on it, but it's our home not an investment, so that's not a problem. If we can't sell by next month, it will come off the market and we'll look at short term sales marketing during the last three months of the rental contract.

Someone mentioned renting and selling at the same time: we looked into this, and due to assured tenancy rules, your estate agency has to offer a six month tenancy, so wouldn't be able to market the property for sale for at least the first three months of a tenancy.