What to do if I want to rent a flat that I bought with a loan?

General Chat
1

Hi. I bought a flat with a loan. I am paying the loan monthly. What I need to do to rent it out?
Thanks

2

I assume you mean a mortgage. If so, you should really seek permission from the mortgage provider and also seek the permission of the freeholder.

3

Thanks for your reply. I am thinking to rent it out to pay the loan with the rent that the flat will be generated. Can I do this without a BTL mortgage?

4

You will be breaking the terms of your mortgage.

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5

You might be able to apply for right to rent, even though you do not have a BTL mortgage. You’ll need to read your Mortgage T & C’s or speak to mortgage company.

6

Thanks for your reply. The flat is on my name already. I don’t have BTL mortgage because I bought it with cash. I am also a homeowner. The flat is my second house and I am looking forward to rent it out. No idea what to do next.

7

1, You have to get permission to rent from your freeholder. This is usually just a formality, especially if others in your block are already renting. They usually charge a small admin fee.
2. Check whether your property is in a Selective License area. If so, apply for a license which will be £500+
3. You require an Energy Performance Certificate (EPC) rated E or above.
4. Get electric and gas safety certificates approximately £200 and £80 respectively.
5. Once all above is in place you can market the property and start to accept viewings…

It is a lot to take in for a first time landlord but it is doable. My advice would be to familiarise yourself with your obligations as a landlord. May be undertaking a landlord training course or consider giving it to an agent to manage.

Good luck!

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8

Yes, it will be a lot to take in but I am willing to learn. Thanks again for your time.

9

Youve made contradictory statements about how you bought this property was it with a loan or was it with cash?

Once you establish whether you need and can get consent to let, then if you dont know where to start, find a reputable local letting agent.

10

So, given that you have bought the property with a mortgage (not cash or loan) then:

  • apply for right to rent with the mortgage company. Note that if you have not had the mortgage for a long time and never lived/intended to live there you’ll be most likely be denied and have to convert it to BTL.

The reason is that residential mortgages are set up in a different way and with a lower interest rate. So if you bought it through a residential mortgage with the intention of letting you’ve made a mistake.

  • there is no need to ask the freeholder for permission to let the property like someone stated above. It may be a courtesy by yourself but no requirement. However, you should let the management company know that they can’t send letters to you on that address etc.

(Technically you may be obliged to ask for permission if your lease says so but they have no right to deny you unreasonably and most management companies just like the extra income, which don’t need with their extortionate fees).

11

I used a personal loan and my savings. I am paying thecloan back. Thanks.

12

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