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Can I Rent Out My House in Secret?

by Sarah Halloran

If you are thinking about renting out your house then you could face an extra 1.5% of interest being added onto your mortgage rate and high administration charges.  That might make you wonder if you can get away with renting in secret.

Property transactions continue to slump and whilst some mortgage lenders are reducing their deposit criteria, many are still demanding large deposits in return for good deals.  This is making many homeowners consider renting to move, rather than selling up.

This process involves renting out your house so that you can rent another and gives owners a chance to ride out the slump and also avoid the high cost of moving home.  Unfortunately, the response from mortgage lenders has been fairly unsupportive in recent years.  Where once many mortgage lenders would grant a ‘consent to let’ and maybe charge a small admin fee, many now demand a significant rate hike in addition to larger administration fees.  It seems the mortgage lenders aren’t keen on the idea of renting rather than moving and with good reason from a business point of view.

So, back to the question – can you rent your home out on the quiet?  With many lenders forcing borrowers into expensive buy-to-let products and charging high fees it can be very tempting to rent without informing your mortgage lender.  However, according to the Council of Mortgage Lenders, you would be committing serious mortgage fraud.  Also, any tenancy agreement you draw up and agree with the tenant will be null and void should the mortgage company find out you are renting and wish to take matters further. There have been cases of tenants being served eviction notices for the next day and any agreement you have put in place will not be valid.

If you are serious about renting out your home for the foreseeable future then it’s very wise to tell your mortgage company. Not only will you sleep better at night, but you can also be sure you are operating in accordance with your mortgage agreement and tenancy law.  You will also need to advise your home insurance provider to ensure the right insurance is in place.

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To rent or sell? That is the question.

by admin

My longstanding tenants gave me notice this week and will leave in four weeks and so I’m going through the traditional ‘shall I sell up?’, ‘shall I rent?’ dilemma.

I always start by looking at what’s for sale and to rent in the area and how much is being asked I know I know asking prices can be higher then actual recieved price/ rent – but at least you know the competition and the prices potential tenants and buyers will be comparing you with. After all you have to put yourself in their shoes and see what else they could get for their money.

It may be better to sell a buy to let rather than rent it out again

Letting property in the UK?

I make a list of the properties in excel, grouped by price (£170k, £175k, £180k, £185k etc…), there were a few at either end and a lot for £175k so I know th

ere’s some choice out there – looking at the more expensive ones they had new bathrooms and kitchens whereas mine does not – neither does it have double glazing but on the plus side it has three double bedrooms and a long gar

den which backs on to a private park. Usually these victorian terraces back on to one another with little privacy outdoors.

Primelocation and Rightmove have always been my hunting ground s for t

his type of data – then a look at sold house prices in the area. This is free information held by the land registry but now made available in a variety of places – Nethouseprices is a good one. This Land Registry data is however 6 months old as it is compiled from the new registration of land titles and can

take time to become availabale. In a stable market this doesn’t matter but in recent years prices have fluctuated greatly over relatively short periods. The recent pick up this year for example won’t show in sold prices yet.

Then on to visit The Best Estate Agent In Reading. A former neighbour of

mine, fantastic salesman (I bought a house from him a few years ago) and trustworthy – the latter characteristic being the one i most value in an Estate Agent (or anyone for that matter).

He asked pertinent questions – how much did you buy it for? How long

can you afford to leave it empty? What condition is it in now? Have you updated, modernised? He’s worked this area for about 6 years and remembers the house, knows the road and I trully believe he could sell it for me.

The probalem is the market – 6-8 weeks fto sell, worst case scenario £170

k he says, best £175k – depends if you can afford to wait but the market is slow and doesn’t look to be heading to 2008 levels this year.

His advice? Rent and sell concurrently – ensure the Buy to Let mortageg is covered and start marketing the property – for the price of a HIP at £249 and nothing else to lose.

Finally, I was very surprised by the figures on Zoopla in terms of the pr

edicted value of the property. I first read about Zoopla in .nett magazine in sydney where they were profiled about 18months ago. Looking at the Board of Directors, the technology and knowing a bit about the market I could see great potential but the property data was simply rubbish. I knew my area nd t

he market and prices were way out. But they’ve obviously built up enough data and got smart enough about cleaning it up and kneading it in the right way to bake up a plausable Value Estimate of £176,979. The rental value was still way out – £626pcm when I know that going rate in the area to be around £750. Not bad though and another tool in the toolbox – I think we’ll continue to see good things from Zoopla.

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