Mortgages & Let Houses

Discussion in 'Finance, Property, Law' started by yellowbelly, Sep 21, 2005.

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  1. Just wondered if anyone has come across this before. I have had a house for 10 years (lived in it for a while) but for the last 4 years it has been rented out and I have lived in quarters. I approached my current mortgage lender (Alliance & Leicester) to get a bit of extra money to do a bit of work on the house, and a bit extra to pay off a couple of loans. Even though I have paid them £150 every couple of years for their "permission" to let it out, they point blank refused to lend any extra money on the house as it was rented out. After a few frustrating phone calls, they even accepted the fact I would go elsewhere for a mortgage. Having picked a decent rate, and confirmed with new company on the phone that my scenario would not be a problem, I sent back paperwork but have now been phoned to say they may not be able to give me a re-mortgage because it is let out. Current mortgage is half the value of the house and the new one will only be 2.5 times my annual income. Am waiting phone call tomorrow but ready to launch telephone based rocket attack if answer is a "No". Have explained this is not a "Buy to Let" just a squaddie who doesn't live in his house because of doing his bit for Queen etc yet gets treated like a leper. Anyone come across this, or can recommend a "decent" lender who would not see this as a problem? Thanks in advance.
     
  2. I'm in the same boat as you. I had to go buy to let after Bristol & West lied to me. Check the financial papers for a best deal, otherwise employ a financial agent. I used www.mortgagesavingscentre.com, it cost a few quid but I saved a fair bit in the end by swapping to another company.

    More importantly(if you don't already know), you should n't be paying tax on your rent as its your only property and you are HM Forces.
     
  3. Have you got a link / reference to any Inland Revenue docs which state that, please?

    VMT

    Nasch
     
  4. I've been Letting now for about 8 years and you are able to offset your mortgage interest, plus expenses, agent fees, 10% wear and tear on furniture, house repairs, house, building, and tenant insurance plus other stuff against the profit on the house.

    I have been in neg profit since buying it therefore I havn't paid any tax on the rental income. Having spent many hours on the phone discussing with the friendly taxman what I can screw the system for, I was never once informed we are excluded paying taxes on the property just because we are in the forces or even if we live abroad as we are UK tax payers earning profit on a UK property. BTW you can claim legal expenses for the arangement of contracts through the army.
     
  5. Yup, this was my understanding too - and I believe you can carry the aggregated losses forward so if you do start making a profit in years to come then you can set the current losses against it. However, just thought I'd check with BRAINDRAIN as, if there's no tax liability, that means I don't have to do a tax return, which would make me happy.
     
  6. Ah.. renting out and building societies...

    I am lucky enough to have a second house, in sunny Wales. For the past couple of years I have been content to leave it empty and just pop down there once a month to do a bit of maintenance and keep the cottage-burners at bay by being seen to be a switched-on property owner. Inevitably though, all I would do was get blind drunk and maudlin hudddled over a roaring fire, then walk around the garden wearing nothing more than those natty wellie-shoes you buy in garden centres looking for somewhere to p1ss or crap just for the novelty of being able to do it... then I'd wake up with a hangover big enough to sink an empire (usually because the only booze in the place was a couple of bottles of scotch that have been lingering for at least a decade), feel like sh1t, get nothing done and end up driving out of the village on the Sunday evening feeling and looking like convict on the run. In fact, that's probably why the cottage-burners kept well clear.

    Anyway, a few months ago I decided that enjoyable though this was, it was a bit of a waste and rented the place out (unofficially) but on a proper six month contract, to a couple in the village. All went (relatively) well but then they moved away, muttering something about crap in the garden. In the meantime I had written to the building society for the all important permission to rent it out properly and subsequently a big form arrived, which I duly filled out and then returned, quite pleased with my own efficiency.

    Then came the Letter. A Letter which was one of those masterpieces of officialdom that you hear about, but never think you'll be lucky enough to receive. A Letter that after reading 43 times I decided that I had better pretend had never arrived and carry on with the renting anyway. So I started looking for another couple from the village who wanted to rent a house, a house with a curious smell in the garden.

    Last week the Letter came again. Exactly the same. They won't let me go, I realise that now.

    The Letter is surprising clearly written. It is not one of those icons of gobbledegook that you sometimes get from government quangos or the Health and Safety people and that is a pity. Because there can be no doubt what it is actually saying.

    It says...That I am not allowed to rent out the property without their consent. This is bold and frightening and underlined for good measure. Unambiguous and dictatorial.

    Then....They will not give their consent, until I tell them the date the tenancy is due to start (so they can charge me a slightly higher interest rate from that date).

    So...I can't have a tenant without their permission and I can't have their permission without a tenant.

    I have to admit that I did fax them a rather sarcastic letter last week and have since heard nothing. I think I may have I blown it.

    Anyone want to rent a house in Wales? The garden is as fertile as hell.
     
  7. AWOL, sympathy mate. What makes me even more pi$$ed with the A&L is that I received their permission, and paid £150 for it. Anyway, just wrote snotty letter, see what happens.
     
  8. Read the mortgage deed. You WILL HAVE AGREED not to let out your gaff without their approval.

    If they catch you doing so, they are entirely within their rights to hoy up the interest rate or even hoof you out / demand repayment.

    There is no shortage of lie to bet, sorry, buy to let lenders out there - but do what I do - see an INDEPENDENT FINANCIAL ADVISER.

    Cheers

    BB
     
  9. I had the same type of correspondence as Awol from my lender. I also went ahead and let the place, without their consent. I don't think they'll ever find out and, bearing in mind I own two thirds of the bloody house anyway, my conscience is clear. I've taken out landlord's building insurance (£25 per month on a £230000 property) and the professional couple renting it are model tenants. I have to confess to pi$$ing in the garden, which I consider a water-conservation measure, but I've yet to progress to doing my own muck-spreading!
     
  10. Well I'm with Nationwide who had no problem when I informed that that I now rent it out I even stayed on the same morgage rate, infact they've lent me an extra £8000 flexadvance to buy a time share which has the house secured against it.