Sorry this is off topic but as a number of you seem to be landlords
judging by previous posts you may be able to help.

I apologise in advance if this is a naive question.

I shall be renting out my house for 12 months whilst I backpack round
the world.

The T&Cs of my mortgage state that mortgage will go up by 1% if the
property is rented out.

What's the best strategy to avoid this increase?
Should I threaten to switch to another provider? I currently have a
redemption penalty so this is and idle threat, plus I haven't got time
to remortgage before I go away. Should I argue that there is no
increase in risk - insurance cover will be extended - it's a company
let etc.

Should I just not tell them. What are the ramifications if I don't tell
them? I know I'd be absolutely insane to not to tell the insurance
company, but are there any specific tax implications related the type
of mortgage I have. (This is a one off let).

Any thoughts/words of wisdom would be welcome

Charlie

Charlie wrote:
Sorry this is off topic but as a number of you seem to be landlords
judging by previous posts you may be able to help.

I apologise in advance if this is a naive question.

I shall be renting out my house for 12 months whilst I backpack round
the world.

The T&Cs of my mortgage state that mortgage will go up by 1% if the
property is rented out.

What's the best strategy to avoid this increase?
Should I threaten to switch to another provider? I currently have a
redemption penalty so this is and idle threat, plus I haven't got time
to remortgage before I go away. Should I argue that there is no
increase in risk - insurance cover will be extended - it's a company
let etc.

Should I just not tell them. What are the ramifications if I don't tell
them? I know I'd be absolutely insane to not to tell the insurance
company, but are there any specific tax implications related the type
of mortgage I have. (This is a one off let).

Any thoughts/words of wisdom would be welcome

Charlie

take the 1% hit, the rent will cover it. keep it simple and legal.

enjoy your trip


RT

Charlie wrote:
I shall be renting out my house for 12 months whilst I backpack round
the world.
The T&Cs of my mortgage state that mortgage will go up by 1% if the
property is rented out.
Should I just not tell them. What are the ramifications if I don't tell
them?

A criminal conviction for obtaining pecuniary advantage by deception? Or
more likely a note on your credit report that deception was used to
obtain a financial service.

I know I'd be absolutely insane to not to tell the insurance
company, but are there any specific tax implications related the type
of mortgage I have. (This is a one off let).

Pass on tax, but it is probably a condition of buy-to-let insurance that
the mortgagor has consented to the property being let. Not telling the
mortgagor could therefore invalidate the insurance.

Owain

Create a highly realistic looking form to "prove" these are house sitters.
Claim the cost against tax somehow!

Only joking............

Phil

Charlie wrote:
Sorry this is off topic but as a number of you seem to be landlords
judging by previous posts you may be able to help.

I apologise in advance if this is a naive question.

I shall be renting out my house for 12 months whilst I backpack round
the world.

The T&Cs of my mortgage state that mortgage will go up by 1% if the
property is rented out.

What's the best strategy to avoid this increase?

Clearly there isnt one thats legal. Many people simply dont tell them,
but others have explained the results of that approach.


Should I threaten to switch to another provider?
I currently have a
redemption penalty so this is and idle threat, plus I haven't got
time
to remortgage before I go away. Should I argue that there is no
increase in risk - insurance cover will be extended - it's a company
let etc.

which part of '1% extra if you let' are you struggling with? We're
talking about a 6 figure mortgage, with written and signed documents,
not Joe on the street that you can bull**** over a fiver.


Should I just not tell them. What are the ramifications if I don't
tell
them? I know I'd be absolutely insane to not to tell the insurance
company,

would make the insurance invalid, and might be fraud or something
similar.


but are there any specific tax implications related the type
of mortgage I have. (This is a one off let).

Any thoughts/words of wisdom would be welcome

Charlie

Grow up


NT

"Charlie" wrote in message
ups.com...
Sorry this is off topic but as a number of you seem to be landlords
judging by previous posts you may be able to help.

I apologise in advance if this is a naive question.

I shall be renting out my house for 12 months whilst I backpack round
the world.

The T&Cs of my mortgage state that mortgage will go up by 1% if the
property is rented out.

What's the best strategy to avoid this increase?

Threaten to switch to C&G even if it's an idle one.

Owain wrote:

A criminal conviction for obtaining pecuniary advantage by deception?
Or
more likely a note on your credit report that deception was used to
obtain a financial service.

Crikey sounds pretty serious - I'm guessing a prison sentance would be
involved here.

Pass on tax, but it is probably a condition of buy-to-let insurance
that
the mortgagor has consented to the property being let. Not telling
the
mortgagor could therefore invalidate the insurance.

Owain

OK - that's why I asked. I'll ring the insurance company and check if
it is a condition.

Mike wrote:
"Charlie" wrote in message
ups.com...
Sorry this is off topic but as a number of you seem to be landlords
judging by previous posts you may be able to help.

I apologise in advance if this is a naive question.

I shall be renting out my house for 12 months whilst I backpack
round
the world.

The T&Cs of my mortgage state that mortgage will go up by 1% if the
property is rented out.

What's the best strategy to avoid this increase?

Threaten to switch to C&G even if it's an idle one.

Sounds like this is the best option.
I'm guessing they want to increase the mortgage because they see the
risk as being greater. What do you think would be a useful counter?
Informing them that
- the property if fully managed
- it is a company let so the income is safer
- more comprehensive insurance will be taken out on the property.

I guess the threat to switch is the last option. Just interested if
anyone else has managed to convince their mortgage company not increase
their payments.

Charlie wrote:
Owain wrote:
A criminal conviction for obtaining pecuniary advantage by deception?
Crikey sounds pretty serious - I'm guessing a prison sentance would be
involved here.

Probably not - you have to do something really bad to get chokey for a
first offencel the effect on your credit (and possibly employment, as
some employers do credit / fidelity check their prospective employees)
would probably be worse.

Pass on tax, but it is probably a condition of buy-to-let insurance
that the mortgagor has consented to the property being let. Not telling
the mortgagor could therefore invalidate the insurance.
OK - that's why I asked. I'll ring the insurance company and check if
it is a condition.

And they will log your enquiry and if there is a claim will ask for
sight of buy-to-let mortgage before paying. ... Bear in mind too that
you will need buy-to-let insurance specifically to cover you against
tenant liability.

For 1% difference in mortgage costs, which should be generously covered
by the rent anyway, it really isn't worth fiddling it.

Owain

Charlie wrote:
I'm guessing they want to increase the mortgage because they see the
risk as being greater.

They want to increase the mortage because
(a) in the event of default, repossession will be harder, and the value
of the property markedly reduced, by the presence of tenants
(b) they know you'll be making a profit on the rent so they are treating
it as a business mortgage
(c) the market for buy-to-let mortgages is not as large, and therefore
competitive, as owner-occupier

- the property if fully managed

Irrelevant.

- it is a company let so the income is safer

Is it? Companies can go bust or be slow paying. The issue is the ability
to repossess the property in extremis, not a few months' payments being
late.

- more comprehensive insurance will be taken out on the property.

Irrelevant. The property should already be covered by rebuilding
insurance -- which WILL be invalidated if you don't tell the ins. co you
are letting.

Owain

Agree with other posters: don't try to hide what you are doing. But
certainly threaten your mortgage company with moving if they want to charge
you the extra 1%. I have argued mine out of this on several occasions. Use
of a professional letting and management company etc may help in this
respect. However barriers to entry in this "industry" are low and
"professional" tends to mean little more than you pay them (too much) for
what they do. Stay hands on.

By the way in over ten years of letting my London house to (usually)
expatriate professionals via (always) a big-name agency I have yet to come
across a "company let" - or to see why it should be better than a let to
individuals (OK may be different if you get Shell or Microsoft).

In most cases you are taking a large risk with your largest asset and should
not expect even to pay the mortgage in return. Do it because because you
want to return to live there and, with luck, keep hold of the capital
appreciation. Do not expect anything other than rubbish service from estate
agents, letting and management people and so on.

"Charlie" wrote in message
oups.com...
The T&Cs of my mortgage state that mortgage will go up by 1% if the
property is rented out.

What's the best strategy to avoid this increase?

Threaten to switch to C&G even if it's an idle one.

Sounds like this is the best option.
I'm guessing they want to increase the mortgage because they see the
risk as being greater. What do you think would be a useful counter?
Informing them that
- the property if fully managed
- it is a company let so the income is safer
- more comprehensive insurance will be taken out on the property.

No. Simply get a quote from C&G (who IMO offer the best such mortgages) and
invite them to match it. I don't know how much of your lock in term is left
but if it isn't too long it would actually be in their interest to get you
locked into a new mortgage BUT at a sensible unloaded rate.


I guess the threat to switch is the last option. Just interested if
anyone else has managed to convince their mortgage company not increase
their payments.

We make sure our mortgages are with companies who don't.

Owain wrote:
Charlie wrote:
I'm guessing they want to increase the mortgage because they see
the
risk as being greater.

They want to increase the mortage because
(a) in the event of default, repossession will be harder, and the
value
of the property markedly reduced, by the presence of tenants
(b) they know you'll be making a profit on the rent so they are
treating
it as a business mortgage
(c) the market for buy-to-let mortgages is not as large, and
therefore
competitive, as owner-occupier

- the property if fully managed

Irrelevant.

- it is a company let so the income is safer

Is it? Companies can go bust or be slow paying. The issue is the
ability
to repossess the property in extremis, not a few months' payments
being
late.

- more comprehensive insurance will be taken out on the property.

Irrelevant. The property should already be covered by rebuilding
insurance -- which WILL be invalidated if you don't tell the ins. co
you
are letting.

Owain

Thanks Owain, that's interesting to note. A colleague of mine did use
this to convince his mortgage company not to bother increasing his
payments. Which sort of why I askedd I wanted to sound out other
people's experiences.

Charlie

Mike wrote:
"Charlie" wrote in message
oups.com...
The T&Cs of my mortgage state that mortgage will go up by 1% if
the
property is rented out.

What's the best strategy to avoid this increase?

Threaten to switch to C&G even if it's an idle one.

Sounds like this is the best option.
I'm guessing they want to increase the mortgage because they see
the
risk as being greater. What do you think would be a useful
counter?
Informing them that
- the property if fully managed
- it is a company let so the income is safer
- more comprehensive insurance will be taken out on the property.

No. Simply get a quote from C&G (who IMO offer the best such
mortgages) and
invite them to match it. I don't know how much of your lock in term
is left
but if it isn't too long it would actually be in their interest to
get you
locked into a new mortgage BUT at a sensible unloaded rate.


I guess the threat to switch is the last option. Just interested
if
anyone else has managed to convince their mortgage company not
increase
their payments.

We make sure our mortgages are with companies who don't.



Thanks for the advice Mike,

I'll have a look at C&G quotes. FWIW I'm halfway through a 2 year fix
with Portman, which of course I took out before I realised I would be
going travelling. They say experience is the thing you gain just after
you most needed it!

Out of interest has anybody managed to convince their mortgage company
not to increase the payments due. There must be somebody.....