Active discussions

Meet the Other Phone. A phone that grows with your child.

Meet the Other Phone.
A phone that grows with your child.

Buy now

Please or to access all these features

Talk
AIBU?

Share your dilemmas and get honest opinions from other Mumsnetters.

Original poster

Re. Permission to rent out my house

44 replies

HooverFairy · 25/07/2013 21:32

I have a house that I no longer live in, I can't afford to sell it as it's in negative equity and I can't change my mortgage deal (or company) because of this. I want to rent it out so that at least it won't be costing me the amount of money it currently is. I read that I must have either permission from my mortgage company to rent it out on a short term basis or that I must change my mortgage to a Buy to Let mortgage which is a higher interest rate. My mortgage company charges £300 to apply for permission and then a £200 per annum fee for each year that the house is rented out. I'm skint, I can't afford a higher interest rate and I'm worried that if I apply for permission then it will be turned down and I'll not only have wasted £300 but I will not be allowed to rent it out.

AIBU to rent it out privately and not tell the mortgage company? I already have the correspondence address as my parents address from when I actually lived in the propery (complicated address, post would end up with a neighbour who stopped passing it on even though it was correctly addressed) so their method of contacting me would remain the same.

OP posts:
hotair · 25/07/2013 21:38

This reply has been deleted

Message withdrawn at poster's request.

LadyBryan · 25/07/2013 21:41

YABU

It simply isn't worth the risk.

It's a shitty situation though

Gruffalump · 25/07/2013 21:41

My advice would be to just do it. It is highly unlikely that the mortgage company will find out.

Really their main concern is whether you make the payments ...

And yes, I have done it! Wink

RatUpADrainpipe · 25/07/2013 21:42

YABU and you are risking losing everything should anything happen. Your insurance, contents and building, would be invalid.

kali110 · 25/07/2013 21:46

Depends who your mortgage is with. Some say that you cannot let a residential property out. Some say to send a letter asking for consent and your reasons.
I wouldn't take the risk. If anything happens to the property then any insurance claims may not be paid out putting you in an even worse financial position.
Not worth commuting mortgage fraud.

Permanentlyexhausted · 25/07/2013 21:49

YABU. Basically the mortgage company is wanting to ensure your letting agreement is watertight so they don't find themselves with tenants who cannot be got rid. Quite honestly, that would be in your interest too, especially as you're in negative equity.

kali110 · 25/07/2013 21:50

Plus if you are found out you will be in breach of your mortgage contract, you could also end up having to pay higher interest rate.

Original poster
HooverFairy · 25/07/2013 22:20

Thanks for the responses - I hadn't really thought about the implications concerning insurance etc. It's so annoying being in this position! I know there are bigger things to worry about but it's having such an impact financially, however, I also didn't consider that I might have to pay a higher rate if I'm found to be in breach of my contract. I didn't think I'd need to worry about this when I bought it!

OP posts:
whois · 25/07/2013 22:22

YABU - not worth the risk! Play by the rules with these things. Also, if you go via and agent to rent it out they will probably want to see confirmation from mortgage co that you have permission (mine did)

jackstini · 25/07/2013 22:27

You have to be safe and tell them.

The extra 300 fee and 200 per year will be easily covered by the rent, and you can offset fees against income tax

Might be worth checking out best buy to let deals with an impartial broker too, just in case they can find something not too painful!

Madmum24 · 25/07/2013 22:37

I have a feeling that my LL hasn't informed the mortgage company that the house is let out; all of his/his wife's mortgage/pension mail still comes here and he hasn't lived here for 6 years!

Darmont · 25/07/2013 22:37

Awful situation and we had exactly the same thing. Had to move our family away and in with relatives and let out our house, as hubby lost job and we got into a lot if debt. We were on job seekers and decided to risk it (not much choice really). We were fine luckily and did it for almost 4 years in the end.

LokiTheCynicalCat · 25/07/2013 22:38

Do it, and get specialist landlords insurance cover because your normal one won't work. I don't really understand why previous posters think it would affect your insurance; insurance is a requirement for most mortgages but mortgages aren't really related to the insurance as far as I know. I don't think it makes a blind bit of difference. I looked into it when I was about to do it, and I was paranoid.

I did it for a year or so (house in negative equity, couldn't sell, couldn't live there and was renting elsewhere) and my tenants were good people who took great care of the place. How is the lender going to know? Get your post forwarded, the agents won't tell the mortgagee, your neighbours don't know who your lender is either so it's not as if they're going to rat you out. If you don't have a mortgage on another property at the same time you'll be ok, but as you say you are living with your parents.

HeyIJustMetYou · 25/07/2013 22:47

love the suggestions to breach mortgage terms on this thread. presumably that goes hand in hand with also not declaring rental income to hmrc to avoid a trail. Sorry for your situation op. Convert the mortgage or sell the place - those are your options. Personally I would do the latter.

maddening · 25/07/2013 22:54

Am in the same position as you - we enquired at the bank who advised only option is to get buy to let on our property and buy another property porting our low rate mortgage to that - but all subject to a) us getting a deposit together as although our mortgage is in negative equity if we were to port it it would need to be 90% loan to value - so we would need a deposit. B) the repayments on the buy to let would be £100 per month over what we could expect in rent - we are fucked c) this would all be subject to an application process so they could say no.

Can't afford to move! Would desperately want to - negative equity is fine if you are happy where you are but if not it is a millstone round your neck!

GW297 · 25/07/2013 22:56

Loads of people do it but it doesn't make it right. I personally wold get a buy to let mortgage if I was ever in your situation. Not worth the risk/worry.

Bearbehind · 25/07/2013 23:02

I know that in theory the bank could call in the mortgage but has anyone ever heard of this happening?

It's not right but as long as you have adequate insurance, what's the worst that could happen?

EachAndEveryHighway · 25/07/2013 23:09

We did it without informing the mortgage company as we were paying £620 mortgage and getting £550 rental income. So we would have been even more out of pocket had we informed them. It was only for a couple of years, and then we were able to sell it.

We did though do everything else by the book - insurance, secured tenants deposits etc, and we did pay tax on the rental income. Wasn't proud of myself for the deception, but due to the circumstances, really had no choice.

hotair · 25/07/2013 23:13

This reply has been deleted

Message withdrawn at poster's request.

kali110 · 25/07/2013 23:13

It affects the insurance as if anything happens, as you are letting the property out without consent you are breaching your contract. Whoever you have mortgage with can ask for all money back, plus you can be blacklisted, meaning you may not be able to get another one due to mortgage fraud. Everyone whose done it you were lucky. I wouldnt take the risk, i have bad luck everything happens to me.

MoonlightandRoses · 25/07/2013 23:15

Sorry you're in this situation, but why not arrange a chat with the mortgage provider? It's in both your interests to come to an arrangement as they won't want to lose out too much either if they don't have to. Go in with the attitude of 'exploring options' to 'make the house wash its face' though.

You mention you read moving to a buy-to-let may be required for short-term lets? Is this a specific reference from the mortgage company literature? If yes, do they define 'short-term'? It may be (although unlikely) you could get around that by offering a let longer than their 'short-term' definition.

Another good place to go prior to approaching the mortgage people is CAB - again, they may have some suggestions that could help you keep the house without it dragging you down.

Hope you get things resolved.

jollyjester · 25/07/2013 23:17

Can you contact your bank and speak to someone higher up than branch level? Explain your situation, the banks handed money out like sweets and that's the reason most of us are in this mess.

Our mortgage deal was up earlier this year but we are in negative equity but still paying away at the mortgage. They wouldn't give us a new deal but DH demanded to speak to a big boss and as a result they gave us a 4 year fixed rate at 80%LTV and waived the fee.

Don't do it behind their back cause that could just lead to further issues.

Good luck

FreudiansSlipper · 25/07/2013 23:17

if your tenants do not pay and you have to claim on insurance it will not be valid if your mortgage company have not been informed

try them again explain why you are having to rent your property out santander did not charge me

ATruthUniversallyAcknowledged · 25/07/2013 23:17

Bollocks. This reminds me that I don't think we ever did this (told the mortgage company we were renting out the house)

Thanks for the reminder OP.

hotair · 25/07/2013 23:18

This reply has been deleted

Message withdrawn at poster's request.