Buy To Let - Filling a rent void
Discussion
Claudia Skies said:
Take for example the government's "rent-a-room" scheme promoted through HMRC with tax relief on small rental incomes. Renting out part of your property is almost certainly a breach of the mortgage conditions yet we never hear of people being prosecuted for it.
Another example would be "change of mind" where a property is bought as a home to live in, circumstances change and the property ends up being rented out. I've never heard of a prosecution for that.
What the Fraud act 2006 says is essentially that, "for an offence to have occurred you must have acted dishonestly AND with the intent of making a gain for yourself or anyone else, or inflicting a loss (or a risk of loss) on anyone else."
Example of fraud:
Wow.Another example would be "change of mind" where a property is bought as a home to live in, circumstances change and the property ends up being rented out. I've never heard of a prosecution for that.
What the Fraud act 2006 says is essentially that, "for an offence to have occurred you must have acted dishonestly AND with the intent of making a gain for yourself or anyone else, or inflicting a loss (or a risk of loss) on anyone else."
Example of fraud:
- BTL rate 6% for mortgage
- Residential rate 3% for mortgage
- Dishonestly obtain residential mortgage for BTL to save 3% and with no intention of living there
- = fraud. Go to jail.
What a load of rubbish........
Applicant applies for mortgage that explicitly states they can't live at the property, with full intention of living at the property???
Fraud.
And people wonder why the credit crunch occurred....
Claudia Skies said:
Take for example the government's "rent-a-room" scheme promoted through HMRC with tax relief on small rental incomes. Renting out part of your property is almost certainly a breach of the mortgage conditions yet we never hear of people being prosecuted for it.
No, no its not. Do you actually know anything before typing, or is this all assumption and conjecture?I rent out one of my rooms, and in my mortgage it specially allows for that as I also live in the property. The mortgage does not allow tenants, but does allow lodgers. Very different meanings.
Sarnie said:
Claudia Skies said:
Example of fraud:
Wow.- BTL rate 6% for mortgage
- Residential rate 3% for mortgage
- Dishonestly obtain residential mortgage for BTL to save 3% and with no intention of living there
- = fraud. Go to jail.
What a load of rubbish........
Applicant applies for mortgage that explicitly states they can't live at the property, with full intention of living at the property???
Fraud....
Thanks for your input on this thread.
RE: School catchments. Some will argue that I am the problem, others will argue that I'm part of the problem, and some will think that the problem already exists and I'm just part of it.
Anyway. It looks like we have more than enough money to have two residential mortgages. In fact, we could probably have a third. Things aren't as strict as I expected.
RE: School catchments. Some will argue that I am the problem, others will argue that I'm part of the problem, and some will think that the problem already exists and I'm just part of it.
Anyway. It looks like we have more than enough money to have two residential mortgages. In fact, we could probably have a third. Things aren't as strict as I expected.
Condi said:
No, no its not. Do you actually know anything before typing, or is this all assumption and conjecture?
I rent out one of my rooms, and in my mortgage it specially allows for that as I also live in the property. The mortgage does not allow tenants, but does allow lodgers. Very different meanings.
You need to distinguish two different things,I rent out one of my rooms, and in my mortgage it specially allows for that as I also live in the property. The mortgage does not allow tenants, but does allow lodgers. Very different meanings.
- Your mortgage contains various contractual conditions,
- The rent-a-room scheme give tax advantage for renting out a room - it doesn't distinguish between lodgers and tenants; it says renting out a room. How a property owner deals with that is up to them.
"Before you take a lodger in https://www.moneyadviceservice.org.uk/en/articles/...
"There are a number of checks you need to perform before taking in a lodger. If you are the owner of the property and have a mortgage, you will need to check with your mortgage lender to make sure you are allowed to rent out a room under the terms of your mortgage contract. You will also need to check with your home insurer that it is allowed under their terms."
BorniteIdentity said:
Thanks for your input on this thread.
RE: School catchments. Some will argue that I am the problem, others will argue that I'm part of the problem, and some will think that the problem already exists and I'm just part of it.
I have some sympathy - we considered moving our granddaughter (and her mum) in with us to get her into our village school. They live on the junction of catchment areas for three schools but the distance and their popularity means she's unlikely to get into any of them so she's likely to end up travelling to a completely random school.RE: School catchments. Some will argue that I am the problem, others will argue that I'm part of the problem, and some will think that the problem already exists and I'm just part of it.
We live 50 yards from our village school, however it's has been full for the last couple of years just with siblings. But based on what's happened previously, many people will immediately report anything they think is un-towards.
Edited by Sheepshanks on Sunday 8th March 16:35
Claudia Skies said:
Condi said:
No, no its not. Do you actually know anything before typing, or is this all assumption and conjecture?
I rent out one of my rooms, and in my mortgage it specially allows for that as I also live in the property. The mortgage does not allow tenants, but does allow lodgers. Very different meanings.
You need to distinguish two different things,I rent out one of my rooms, and in my mortgage it specially allows for that as I also live in the property. The mortgage does not allow tenants, but does allow lodgers. Very different meanings.
- Your mortgage contains various contractual conditions,
- The rent-a-room scheme give tax advantage for renting out a room - it doesn't distinguish between lodgers and tenants; it says renting out a room. How a property owner deals with that is up to them.
The rent-a-room scheme allows you to rent a single room in your house, provided you live there, which is the definition of a lodger, not a tenant.
When you rent a spare room from a live in landlord, you're legally not a tenant, but a lodger or an 'excluded occupier'. This is an important distinction and has implications on the contract between you and your landlord, and on your rights.
http://www.lodgerlandlord.co.uk/2010/03/09/the-fiv...
http://www.spareroom.co.uk/content/info-flatsharin...
Ergo, everything rented under the rent-a-room scheme by definition must be a lodger not a tenant, and that is allowed under all mortgages Ive ever seen!
Sarnie said:
Unfortunately Pete, most of that isn't correct.
One of the main pertinent pieces of BTL criteria is that at no point will you live in the property.
It's fairly straight forward;
Residential mortgages for properties you will live in.
BTL mortgages for property to be let out.
Residential mortgages are regulated contracts and are underwritten under FCA mortgage lending regulations (think MMR etc).
BTL mortgages are deemed to be investments and therefore are unregulated and are therefore not subject to the same underwriting and risk assessments as residential mortgages.
As soon as you move into a BTL property, the use has changed and therefore how it's regulated.
Hi - thanks for that - I'll shut up and let people who actually know what they are talking about get on with it :-)One of the main pertinent pieces of BTL criteria is that at no point will you live in the property.
It's fairly straight forward;
Residential mortgages for properties you will live in.
BTL mortgages for property to be let out.
Residential mortgages are regulated contracts and are underwritten under FCA mortgage lending regulations (think MMR etc).
BTL mortgages are deemed to be investments and therefore are unregulated and are therefore not subject to the same underwriting and risk assessments as residential mortgages.
As soon as you move into a BTL property, the use has changed and therefore how it's regulated.
Edited by Sarnie on Friday 6th March 15:07
As it seems you can actually get a residential on top of your existing one then this is the best thing to do. This is better anyway, as your idea of just living in the house for 4 months during the application peroid will most likely backfire. This means you will have already moved out and rented the property before your child even starts in the school!
I would suggest you actually live in the house for the whole period, from application through to some time after your child has started in the school. You may see this as costing a lot more, by losing potential rent, but its more fair (i'm sure lots of people move out of catchments for many reasons after their child has started) and you won't get chucked out before you are even in as there is a strong chance someone will dob you in doing what you are suggesting. Not sure how the LA could remove the place if you are actually living in catchment, wether you had another house outside or not.
I would suggest you actually live in the house for the whole period, from application through to some time after your child has started in the school. You may see this as costing a lot more, by losing potential rent, but its more fair (i'm sure lots of people move out of catchments for many reasons after their child has started) and you won't get chucked out before you are even in as there is a strong chance someone will dob you in doing what you are suggesting. Not sure how the LA could remove the place if you are actually living in catchment, wether you had another house outside or not.
Claudia Skies said:
Sarnie said:
Claudia Skies said:
Example of fraud:
Wow.- BTL rate 6% for mortgage
- Residential rate 3% for mortgage
- Dishonestly obtain residential mortgage for BTL to save 3% and with no intention of living there
- = fraud. Go to jail.
What a load of rubbish........
Applicant applies for mortgage that explicitly states they can't live at the property, with full intention of living at the property???
Fraud....
Gassing Station | Finance | Top of Page | What's New | My Stuff