Q.Dear James, I need to move for a new job, but I can't sell my house. I'm going to rent it out for now and see if the market picks up. A friend said I have to tell my mortgage lender. Is this true? Won't they just make me take out a more expensive buy-to-let mortgage?
A.The short answer – and it’s probably not the one you want to hear – is yes. If you’ve been living in a property on which you had a residential mortgage, but are intending to move out and let the property, you will need to inform your mortgage lender. If you were still living there and had simply taken in a lodger, you wouldn’t normally need to tell your lender.
Most residential mortgage terms require your lender’s permission to rent out the property instead of living in it yourself. If you don’t consult your lender, you may be in breach of your terms – read the small print before-hand. As most lenders will charge a fee to even answer the question, it’s tempting to keep quiet. But there are many ways in which lenders can discover you’re no longer resident (mail returned by tenants is the most likely scenario), so honesty has to be the best policy. It’s not worth the risk.
Most lenders are sympathetic but be prepared to argue your case: go armed with figures of what your rental income is likely to be and proof that this would more than cover your mortgage plus maintenance costs and any void (empty) periods. Some lenders will hike your rate by about 0.5 per cent and give you permission. Others will insist you switch to a buy-to-let mortgage; this will probably be more expensive than a residential one and you may also incur early repayment fees on your original mortgage.
Some banks offer a rental window – so if you’re going to rent your place for one, two or three years, they won’t force you onto a buy-to-let mortgage immediately.
Q.Dear James, my tenant moved out last week but she’d left stuff in the flat. Some of it looks like rubbish, but there is also kitchenware, clothing and some furniture. I'm assuming she can't be bothered to dump it. Is it okay if I do so?
A.Even if it looks like rubbish, you need your tenant’s permission before you can get rid of it. But you are allowed to remove the items from your property and store them, so you can get on with re-letting.
I recommend you get this in writing. If you can’t reach her by informal means, then you need to write to her by recorded delivery, asking her to collect the goods within a reasonable period (say four weeks). Give your contact details, details of the goods and where they are held. You can advise her that if they are not collected, you will sell or dispose of them. Keep a copy of the letter and the recorded delivery slip so you can prove you’ve tried to contact her.
If you don’t have a forwarding address (and you should always try to get one), you need to show you’ve made reasonable efforts to trace her before you can dispose of the items. Tracing agents offer “no-find, no-fee” arrangements and may be your best option in this case.
If you still can’t contact her, you have a duty to dispose of the goods in the most advantageous way possible. If they have any value, you should sell them rather than dump them. Any monies raised would, strictly speaking, be the tenant’s but you are entitled to deduct any costs incurred (eg, auctioneer’s or eBay fees, advertising costs). Again, keep a record in case she turns up later, demanding her goods – it does happen.
James Davis is managing director of online lettings agent www.upad.co.uk. You can also follow Upad on Twitter: @avoidthevoid.