Renting out our flat? is this a good idea???

[ELR]

We want to move but know it will take ages to sell our flat, rentals are good in our area so we are thinking of letting it out but we are a bit scared!!!
Please tell me this is a good idea, we will rent ourselves but obviously we will still need to pay our mortgage on our flat.
What happens if we have a break in tennents ect or cant re-let it?
I am desperate to move from London back up north so its not like i can move back in if it all went tits up!!
Has anyone done this?

You will need to ask permission from your Lender. If they won't give consent you convert to a Buy to Let mortgage. Buy to Let mortgages are reverting back to the rent having to cover 130% of the interest payments as they used to I think and a lot of lenders have withdrawn from the market as a result of the credit crunch.

The insurance company will need to be informed and you'll need to get a Landlord's certificate for the gas appliances.

If you have a break in tennants, or they stop paying the rent or you have a void then obviously you need to make sure you can cover the mortgage, insurance etc.

It helps if you can line up workman in advance for the inevitable problems that crop up and make sure you have enough funds put aside to be able to cope with the maintenance and emergency repairs.

We did it when we moved about 8 years ago. It has been OK a lot of the times but there have been times when it has been very difficult due to the distance and it only due to my lovely lovely tennant who been there since we moved out that I have continued with it.

thanks for answering, what is the likely hood of them refusing consent? we are planning to use an agent, do you know about how we stand with regards to tax.
dh is very cautious so i have to really sell this to him

also if i converted to a buy to let what would that mean in real terms

I'm not sure to be honest about them refusing consent, I wouldn't have though they were very likely to, as long as you have a reasonable amount of equity in it, but it really does depend on the lender, so best to ring. I would think though as you aren't looking at buying anything else then they would be OK about it.

If you need to convert to a buy to let one you will be on a higher interest rate. Our one that (I hope) is going through at the end of the month is 6.19% but with fees of 1k. This was the second company the broker tried, the first one pulled the deal apparently. I think the rates are probably a bit higher now as he sorted it out a few months ago.

There were a fair few buy to let products available at the beginning of the year but most of them have vanished now. They would want a certain LTV, ours is 75%. Actually I have just looked at the Bristol and West site, the one we have offers for has now gone to 6.99, up from 6.19%, so I am sitting here with my fingers crossed ours goes through.

we have about 170k-190k equity and dont really want to change our mortgage as have a good deal with no fixed term
its just scary as would be commiting to renting for a good few years

Well that sounds a healthy amount to have. Maybe you should ring your lender to find out if they will give you permission so you know what your options are.

Most lenders will allow you to rent your property without any changes to your current loan for 3 years so it is in like with the current capital gains tax legislation.

cheers, just had the agent round to do the photos so as soon as they find me a tennent i will let them know!!