Guest rache&matt Posted November 29, 2010 Share Posted November 29, 2010 Hi, We like many are possible going down the renting our home in UK out route as market so rubbish. My question to anyone out there in the know is....rental agents like to hear that you have informed your mortgage lender that you are renting your house out. Is this a legal requirement or is it really none of their business??? We dont want to change mortgage really and think if the bank knew we were renting they would insist we go on a buy to let. Any help much appreciated. Thanks Quote Link to comment Share on other sites More sharing options...
Guest guest33730 Posted November 29, 2010 Share Posted November 29, 2010 Hi,We like many are possible going down the renting our home in UK out route as market so rubbish. My question to anyone out there in the know is....rental agents like to hear that you have informed your mortgage lender that you are renting your house out. Is this a legal requirement or is it really none of their business??? We dont want to change mortgage really and think if the bank knew we were renting they would insist we go on a buy to let. Any help much appreciated. Thanks It depends on your definition of 'legal'. The agreement with your lender almost certainly prohibits you from renting out your property without their permission so you will be breaking your contract with them but not technically breaking the law. However it could invalidate your insurance and could give your mortgage lender grounds for calling in the loan should they so wish. On the other hand I know of many people who have not informed their lender and I haven't heard many stories of problems so make your decision being prepared for the worse but not necessarily expecting it. The reason the letting agency will insist on knowing that your lender is happy is because technically the laws of repossession are infront of the housing act so if for any reason your lender is unhappy and calls in the loan then then the agency suddenly has a very unhappy tenant on his door looking for compensation from somebody and its usually the agent who will be in the first line of fire. Just as an aside the one organisation you must always tell is the government. My company (along with all major letting agents) are regularly audited by the tax department looking for overseas owners - they also have teams looking for those who rent out properties privately as well. The fines are punitive to both the agent (if there is one) and the landlord - my company was once fined £10,000 purely because a couple of landlords had failed to inform us they had moved overseas (fortunately I was able to recover this from the landlords). Hope that helps Daniel Owner LET-it Home Page Quote Link to comment Share on other sites More sharing options...
Guest rache&matt Posted November 29, 2010 Share Posted November 29, 2010 Thats a really helpful reply, thank you. Maybe a stupid question, but when you say you must inform the government, who exactly do you mean???? The taxman? Quote Link to comment Share on other sites More sharing options...
Guest guest33730 Posted November 29, 2010 Share Posted November 29, 2010 Hi all the information and forms can be found here: HM Revenue & Customs: The Non-Resident Landlords (NRL) Scheme Basically you need to inform the inland revenue using a form NRL 1 which can be downloaded from the link above Daniel Quote Link to comment Share on other sites More sharing options...
Guest rache&matt Posted November 29, 2010 Share Posted November 29, 2010 Thank you so much for that. Quote Link to comment Share on other sites More sharing options...
cluster13 Posted November 29, 2010 Share Posted November 29, 2010 As bring me sunshine says you have to inform the government !! If letting a property you then need to complete a self assment form ( all uk earned income is uk taxed) if you use an agent then the agent is obliged to deduct tax at source unless you have a waiver. This isn't difficult to obtain also any insurance would be void if they found out ( landlord insurance is also dependent on tenant type ( some companies don't allow dss)). I rent 4 properties in the uk. Pm me if you would like some more details. Quote Link to comment Share on other sites More sharing options...
Guest guest33730 Posted November 29, 2010 Share Posted November 29, 2010 As bring me sunshine says you have to inform the government !! If letting a property you then need to complete a self assment form ( all uk earned income is uk taxed) if you use an agent then the agent is obliged to deduct tax at source unless you have a waiver. This isn't difficult to obtain also any insurance would be void if they found out ( landlord insurance is also dependent on tenant type ( some companies don't allow dss)). I rent 4 properties in the uk. Pm me if you would like some more details. Just to clarify, The insurance would only be void if it was taken out through the lenders and you hadn't informed them (and even then it would depend on the terms and conditions) There is some excellent landlords insurance out there these days which can cover you for pretty much anything and it's pretty cheap too Daniel Quote Link to comment Share on other sites More sharing options...
Pumpkin Posted November 29, 2010 Share Posted November 29, 2010 I am sure my letting agent did not ask about my mortgage. When I called my bank they told me that letting out was not allowed under the terms of my mortgage and I would have to change the mortgage. I then told them that my move was temporary (which it could be!) and they agreed I could keep my mortgage for a temporary period. I will have to review it at some point. Just depends who your mortgage provider is really. I changed my insurance to reflect that I am overseas and renting the house out. I would never recommend being anything but 100% factual with insurance. Quote Link to comment Share on other sites More sharing options...
Goochie Posted November 29, 2010 Share Posted November 29, 2010 You also need to consider your home insurance policy and the connection between the insurer and the mortgage company. Many mortgage policies are conditional on you having adequate buildings insurance. You will need to cancel your normal insurance policy in order to be covered for renting, and the insurer MAY tell the mortgage company about it. Besides, when we looked at renting our house our, Aliance and Leicester said it would only be a £120 admin fee, so its worth asking the question. Quote Link to comment Share on other sites More sharing options...
kernow43 Posted November 29, 2010 Share Posted November 29, 2010 I believe another reason for letting the lender know is they increase your interest rate! Quote Link to comment Share on other sites More sharing options...
cluster13 Posted December 1, 2010 Share Posted December 1, 2010 Just to clarify, The insurance would only be void if it was taken out through the lenders Daniel I appreciate that I have truncated your post but I do not agree with the above. Not only will standard buildings insurance probably be void if you let your property out but even landlords insurance is specific to the type of tenant. Ive come a cropper on this recently. Quote Link to comment Share on other sites More sharing options...
rockola57 Posted December 1, 2010 Share Posted December 1, 2010 This is one of those areas where many of us bury our heads in the sand,sweep it under the carpet and hope nothing will be noticed!Truth is though,put your self in the lenders shoes!What if there was a fire,what if someone died?A burglary? an armed siege?A false sale?The list is endless,so it's best to be up front on this issue,as it may come back to bite you on the asre big time!!!!:yes: Quote Link to comment Share on other sites More sharing options...
Recommended Posts
Join the conversation
You can post now and register later. If you have an account, sign in now to post with your account.