DH and I own a flat in London which we rent out because we now work in Oxfordshire (jobs started at the same time as the credit crunch). We have a mortgage with first direct who allowed us to rent for a year.
I phoned them today to find out if we can rent it out for another year - the tenants are graduate students who will finish their course next June and move on anyway. FD said no and immediately removed our ability to draw down overpaid funds on our mortgage.
Apart from being furious about the whole thing because they didn't actually say that this was a one year only deal or send us any revised terms and conditions, I'm also a bit confused.
I've done some basic research and found that the amount we're getting in rent won't cover administration fees and early repayment charges to switch to a BTL mortgage for a year and it really would only be a year so the only option appears to be selling.
The tenants are on an AST so I guess we have to give 2 months notice? Does anyone know whether we are likely to have problems with the mortgage co during this notice period or should they just accept it?
Also, we'll then need to do a little bit of repair work to make it sellable but don't really want to put it on the market just before Christmas. Are we likely to have any problems with the mortgage co if we just leave it empty until it is for sale or sold? We'll obviously be paying the mortgage all the time.
Finally, if we're not using it as a BTL, does anyone know if we can get the draw down thingy from the mortgage restored?