Help please - Building Society Rip Off

Discussion in 'Finance, Property, Law' started by ND303, Aug 25, 2004.

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  1. Dear All

    I am after some help or advice. As we all know when we buy a house we cannot always live in it because of our continual moving. I have recently bought a house but have had to rent out due to a recent posting. My Building Society has said that as I am now renting they will increase my mortgage rate by .5%. I have argued that this is still my primary place of residence but the swine’s have stated that they will make no exception to a military user.

    Can anyone advise on the following?

    Can they do this?
    Do we military types have any sort of protection in this instance?

    The building society name to follow if anyone is interested :!:

  2. Do you have a tenancy agreement for the occupying tennant?

    Do you pay council tax in your name at the property?

    Have you read the terms and conditions of your mortgage, did you read them before you completed, knowing you may be posted away?

    Do you tennants claim any benefits?

    If they have only increased it by around .5% then consider yourself lucky, most buy to let schemes are much higher than High st banks
  3. Why did you tell them you were renting?

    Silly boy.
  4. I have a second property and the 'Buy to Let' mortgage is 1% higher than the normal one. So 0.5% seems OK.

    The idea is that when you let your property you should be making enough to cover this increase in the mortgage, and then some! The banks increase the mortgage because they also want a slice of the money pie which you are earning by letting the property.

    The property is NOT your principal property as you are not living there. When deciding how much to rent out your property for you need to take into account the increase in interest rate, the fact that you are (or should be) paying the buildings insurance and some extra amount for the repairs and possible improvements you are liable for. If you go through a letting agency they will tell you a fair price to rent which will give you a decent amount of profit (having said that they will charge you for this service as they also want a slice of your money pie!)

    You should NOT be paying poll tax, contents insurance (unless letting as furnished accomodation), TV license, utilities, etc.

    I think that a 0.5% increase is fair and is less than most banks and buiding societies. Just because you are in the Armed Forces does not justify favoritism. There are lots of other jobs where people can be expected to move around on a regular basis and don't receive any extra benefit for not living at a permanent address.

    Sorry :roll:
  5. ND303

    Had the same problem a few years ago, spoke with the Building Society in question and found out that as I was posted and had no choice I would not get charged. All I then had to do was show them either a copy of the posting order or have my CO write to them. (Cannot remember which I did).

    I am not sure if there is anything in the statute books covering this, there used to be a few civil law sections that protected the Armed Services, i.e. renting out and posted back suddenly only have to give months notice and such like. Speak to a Solicitor if the Building Society does not help.
  6. I understand your position and can sympathise completely as I too am a home owner and I rent out my property therefore my position is not dissimilar to yours.

    The issue is one of contractual business arrangements and a discernible increase in risk of damage to your property (that the building society has a financial interest in).

    The crux of the argument is that you do not have to rent it out - you have chosen to, and that comes with an increase in risk to the building society's interests. This is because it is you that has the contract with the building society and not your tenant.

    The buidling society can mitigate the risk by increasing your payments to take account of it, quite lawfully.

    Unless it was a term of your contract, they do not have to allow you to rent it at all, so if I were you I'd feel quite lucky with a small increase in payments.

    There is a stack load of other stuff you also need to be aware of, Tax returns etc.......don't get caught, the Inland Revenue are not known for letting you off.