Renting out our house

[Shopper99]

Might be moving abroad so would want to rent out our house. Earliest we can remortgage would be 1st Feb 2017 but we are likely to move abroad my Xmas this year so we'd have no UK income by then (but would have a decent foreign income). Current LTV is about 58%.

My broker is on holiday and I'm being impatient! Can anyone give me an idea of what we need to do in preparation for renting our house out and then remortgaging please?? Current mortgage provider is Halifax, not loving their buy-to-let mortgages though wondering if sticking with them will be easier than getting a new mortgage early next year?

I'm with santander who seem to be similar to Halifax in products and terms (main home is halifax mortgage)
And we changed our mortgage to btl for a£300 fee. We are on their standard variable rate as out ltv isn't right for a product.
They may allow you to change the product without paying any early repayment fees.

It will be easier to stay with them but financially you'd have to look at some other products to see how much you could save.

You would need to complete things like electrical safety checks and gas safety checks as well as making sure that the h+s is up to scratch.

Are you planning on using an agent? If so they can manage all of the h+s stuff for you.

We were allowed to get "consent to let" originally whilst still on our old mortgage... This lasted a couple of years but as it was, we then switched to a btl interest only mortgage (we are accidental landlords so using excess to overpay on our own mortgage)
We signed up with a package from British Gas which includes gas safety certificate, boiler cover and 24 hour emergency cover which the tenant can call direct...
You need landlord insurance.
Are you going to use an agent? If so, get quotes and beat them down! We wish we had been more cut throat... We were paying ours £40 a month at one point.., for collecting the money! Even now, we manage the maintenance side of things and still pay £20 a month.

We write to our lender advising we intended to rent our flat and got consent to let it in the original residential mortgage.

So I think we can get a consent to let from Halifax but that would only see us out to when that mortgage deal runs out (30th April, we can change Halifax products 3 mths before then so 1st feb at the earliest, with no fees) but what happens after that date when we need to remortgage? I don't think we could afford to go on the standard rate as that is a fair whack higher than our current rate. Also their BTL rate isn't that competitive so ideally I think we'd like to change mortgage providers but I'm wondering how successful our application might be if we only have an overseas income by that point??

You need to dfo the sums based on a realistic rental figure, allowing for all the insurances, agents fees, fixes , tax, maintenance, gardener et. Etc.

You also need to get all your stuff out, fix everything in the house and get it looking good.

You also need to get advice on your tax position when you are expatriates.
Essential .However do not let it worry you .Much seems to depend on whether the UK and the country you are planning to live in have a double tax agreement. The UK has such arrangements with many countries.
Paperwork is necessary to prove when you left the UK how long you were out of the UK and any visits you made to the UK whilst living abroad.

There are numerous sites on the web which will give advice eg Experts
For Expats. Also Mumsnet has a Living Overseas section and there are
bound to be people who can help.

Not a tax adviser, but when did this the rental income was UK taxable as it arises in the UK. Expat, double tax not relevant.

Yes it is UK taxable but some countries will still require you to declare your
worldwide income. With a double tax agreement you will only pay once.
It all depends which country OP is planning to move to.

I'd get a couple of appraisals for rental market income, then see if your current mortgage provider will agree to give permission to let on your current product - usually dependent on income being >125% of mortgage payments, plus using agent (you'll need to if abroad anyway). Also consider capital gains tax if you sell in the future.

For many, BTL doesn't stack up financially, but if you've got a small LTV it might.

Current mortgage is £1000pm. Rental should be approx £1500pm. LTV will be approx 56/57%. The Halifax's BTL calculator shows monthly payments of £1400+. HSBC's BTL is more on par with our current payment but would they accept us if we applied from abroad?

Tax advice sorted and its Switzerland we're considering.

At a push we could use savings to get the LTV down to 50% or just under. Savings are currently earmarked for extension work on the house which we would put off until we return from Switzerland 2/3/4/5 years down the line so I'm a bit reluctant to dip into them. Though getting the LTV to 50% would leave us with approx 1 years worth of mortgage payments (based on current monthly payments). We'll only have one income in Switzerland so enough to live on, but it might not be possible to save much so it would mean building up savings from scratch when we get home. Not the end of the world I guess - providing we can find work back here ok (which should be possible and mortgage would hopefully have gone down by then too).

Should the EA valuation take place even if the house isn't spick and span? Or should we wait til we're really ready? Good tips re haggling, thanks!

I mean that getting the LTV to 50% would leave us with savings equivalent to 1 years mortgage payments....

I've never paid tax when letting my home and living abroad (in Africa): I had a P85 non resident form and a 'non Resident landlord' form which meant no tax. I believe this only applies if you're letting your only UK residence and intend to return home, but this was the case both times I've done this.

You are obliged to fill in a tax assessment form to declare rental income even if you are a non-resident and your uk income falls below the taxable threshold, as I understand.

"Non resident landlord form" just means that tax doesn't need to be deducted by your agent/tenant, not that you don't owe any to hmrc. As a non-resident landlord you are still required to pay tax through self assessment.

Op it's very, very hard to remortgage if you aren't a UK resident. Try asking in the "living overseas" section here. DH is still paid in the UK so we do have a UK income and still couldn't find a deal better than our current provider's standard rate (plus 1% on top for consent to let).

I should add that our ltv was lower than yours too.

Thanks apple. Did your rental income cover the mortgage?

Will it harm to call Halifax? Should I do it on a hypothetical basis and not give our account details or am I being paranoid?!

I'll give hsbc a call tooted their expat mortgages.

Swiss salaries are higher which might help (but cost of living is high there so disposable income won't be massive).