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Our property investment expert is Jeni Browne, Sales Director at
Mortgages for Business
www.mortgagesforbusiness.co.uk
Tel: 0345 345 6788
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Question
Selling a plot of garden to a developer
I have found myself in a bit of an unusual situation – so I hope you can help! I used live in a small bungalow, which was on a large plot of land in the middle of a small town.
I decided, three years ago, to move to a bigger house as my family was growing. However, I kept the bungalow and have been renting out it, successfully, to tenants. I have a buy-to-let mortgage on the property.
Just after Christmas, however, a developer approached me and offered me a sum of money to buy some of the land on which the property sits. I am very tempted to take him up on this offer as the sum of money is generous.
However, I am not sure, as I have a buy-to-let mortgage, whether I can do this. Do you know if this would be permitted?
Answer
Wow! That sounds like a great opportunity. So this can in principle be done, but your lender would need to grant permission.
To do this, (and they will advise you of their specific process) they will want to be sure that by siphoning off this bit of land, the value of your property would not reduce to the point where the lender’s mortgage LTV becomes too high.
To do this, they will want a surveyor to go and value your property, armed with a plan of where the new boundary will be. If the numbers are still ok for the lender, then there really isn’t a reason why they should object.
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Question
Can I be a UK landlord if I live abroad?
I moved from the UK to Spain over 10 years ago. My parents and siblings still live in the UK but I have my own family now in Spain so I am very much tied here.
Recently, I have been toying with the idea of investing in the UK property market. I wondered whether it would be easy for me to get a mortgage now (I hear rates are really low at the moment) but wondered, are there any obstacles I might face since I live abroad?
I work remotely for a UK company so my salary is paid in GBP.
Answer
There are certainly lenders in the market who offer buy to lets to expats, and the fact that you are resident in an EU country and employed by a UK company will strengthen this.
However, as you are offshore and thus regarded as a higher risk than a UK resident, your mortgage rates will be loaded. The rates are still competitive but be prepared that they will be higher than those you may have seen advertised!
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Question
Change of tenant – do I need to change my mortgage?
My tenant has just announced they are moving out and the end of their agreement and I am looking for a new tenant. It’s a two bedroom flat and my current person is a single man.
I have had interest from a family – two adults and two children. I know this might seem like a silly question but do I need to inform my mortgage lender of this change of situation? I wondered if they might be concerned about additional wear and tear or the fact that a two bed flat might not be appropriate for a family?
Answer
Not a silly question at all – we are all learning as we go!
So no, you would not need to let the lender know about this change as you will still be letting the property on a standard Assured Shorthold Tenancy (AST) agreement.
You would need to notify them if you were going to change the nature of the tenancy (ie let to multiple tenants on separate tenancies or perhaps letting to a company).
So you are right to ask the question, there are times when you would need to notify the lender, but this is not one of them.
Your comment around wear and tear is a valid one, but when lenders assess your mortgage, they look to ensure that you have a financial buffer (surplus rent after mortgage cost) which you can use to maintain the property and keep it in a good state of repair.
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Question
Will my income be taken into account?
I wonder whether you could clear up a little concern I have, please? I am considering becoming a landlord and buying a property to let. I am aware mortgage lenders look at potential yield but do they also consider personal finances as part of the assessment?
In particular I was concerned with income. I am undertaking this venture alone using money from an inheritance but I currently do not work as I am caring for my husband. Could my lack of income work to my detriment?
Answer
Lenders tend to want you to have some income (the amount varies) before they give you a mortgage – the amount they will lend you is determined by the rent which the property will achieve.
Some lenders will accept the income you receive for caring for your husband and also some who will be happy that you have a sizeable amount of cash which will tide you over.
So I am sure that you could get a mortgage, but just be aware that you will likely need a lender who is a little more commercial in their approach and thus are not necessarily the cheapest.
Your best option would be to speak to a mortgage broker who will be able to advise you of the options, based on your circumstances.
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