Renting my flat out, do I need to change mortgage?

If I were you, I'd remortgage to a cheap fix first, then advise the lender your work requires you to relocate temporarily, and ask permission to let it out short-term. Basically, you're paying too much on someone's variable rate, so get it down a bit first via remortgage, then let it out.

You have to ask them to agree to this, and most will OK it but only for (in my experience) 2 years or the end of your current deal, whichever is later. Usually they attach terms, such as you have to let via an assured shorthold tenancy (which you would anyway), because the flat is their security and they need to know they can get it back if they ever need to.

In theory, you could just not tell them. The catch is that if you don't, you have to kid them you still live there, and pay for mail redirection. This will bugger up your credit history, as it won't be clear who you are and where you live - everyone else, cards etc, will have your new address, but your mortgage lender will still be submitting credit reports on you at your old address.

I found London and Country very good when doing something similar recently. They got me a 4.99% BTL fix, portable if I want to sell the flat. They don't charge you, either.

No personal experience but I know someone who has let their house... You have to tell your mortgage provider and they may impose a different rate so speak to them and see what they say. You also have to tell the Inland Revenue. I believe if the rent will be above 4 thousand and something you have to pay tax - see what their website says to get an idea on that one.

No, you don't, at least not straight away. But come the next tax return, you will have to fill in the Land & Property pages. If you don't get sent a tax return form already, you'll need to request one after 5th April after you start receiving a rental income.

No, the rent-a-room scheme only applies if the owner lives in the property parts of which are rented out. If you don't live there, every pound of rental profit is taxable if you already have other income (such as from employment) which exceeds the tax free allowance.

But mortgage interest, insurance, etc, are expenses deductible from rental income. Only the balance is taxable profit.

Are you sure you are not thinking of "rent a room". Surely rent from a let is taxed in the normal way with only the 10% "fair wear and tear" allowance tax free.

Right, thanks for correcting me. That'll teach me to butt in before those more knowledgable!

In message , Chris writes

Others have posted the main points but the main point to check is that your buildings insurance will still cover you if you rent the place out. As you are in a flat it is likely that there is a 'block' policy for the whole building, but check this none the less.

Many thanks to you all for your comments, very much appreciated and I will consider each of the points raised, so I don't miss anything I need to do.

Regards and thanks for your time.

Likewise the contents insurance.

Generally speaking you should require the tenant to insure anything you leave, or accept that if he doesn't and it gets damaged, it comes off the deposit. Finding an insurer who'll insure your contents in a flat you don't occupy wouldn't be easy, IME.

Unfortunately that would usually require the deposit to be many times bigger than is customary.

Most "normal" insurers won't even insure your *building* if you don't occupy it. You need specialist letting policies, and they tend not to be actively marketed to the public, which does make them a bit of work to find. Generally, however, most letting agents will be able to broker such policies. Typically, though, they will not cover contents belonging to the tenant, only to the landlord, so tenants will need to get their own insurance if they want their stuff covered.

Not quite so true these days. Over the last year or two the number of companies offering building insurance to landlords has increased, Norwich union for one.

Mark BR

Alan Boswell Letsure Homelet

are the big names.

The policies I've come across all offer limited cover for landlord contents, if required.

More general info. here including adverts for some insurers I've never heard of.

Daytona (Landlord & tenant)

Check your leasehold agreement to see whether it allows sub-letting. If it does the freeholder can charge what they like for permission.

General links and info. including specific landlord forums on my webpage

Daytona (Landlord & tenant)

We rented our our house for 17 years and had no problem either with insuring it nor with the occasional claim (flooding, vitreous (bathroom) breakage...

Over the years we've insured through a broker, and also through the bank that held the mortgage.

Googling on will give you lots of options, especially for contents. We've insured contents of flats that way. The flats themselves are insured by the management (lessor).

Just for info, we use Homelet, and their premiums have raced up in recent years. Lack of time led us to continue it, but I wouldn't recommend them currently.

John

That doesn't surprise me as they're marketed by a lot of letting agents, so they're using a commission based model rather than advertising in the relevant magazines and landlord group newsletters as Boswell & Letsure seem to do.

Alan Boswell is currently the best for me, for my bog standard modern terrace.

Daytona