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Q&A » Renting your home
Who would I have to inform if I moved out and charged my son a weekly rent to cover household bills? He has also asked if his friend can rent my old room. Where do I stand legally on this? They are both working full time as am I.
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878If you formally move out and rent the property to an independent adult, you would need to notify the mortgage provider.
If the intention would be for you not to return, which it sounds like as regards to yourself, you would need to switch to a new Buy-To-Let mortgage. That would be at a higher % than for a residential mortgage which you currently have. However, you would be able to get tax relief against the rent and other expenses would also be allowable. You would need at least 20% equity in the property to get a BTL mortgage.
If you were only moving out temporarily, you would need a Permit To Let, which would retain the existing mortgage and %.
Moving out would also create a Capital Gains Tax liability if you kept it for a further 3 years. If you have been there for some time, the value would have increased since you purchased and even if the price doesn't rise very much in future, which is quite loikely for some time to come, the existing profit would be spread across future years.
If you don't formally move out and quietly sleep over much more regularly using your current address for postal and voting purposes then you could probably get away with retaining the existing situation. This is not a solution that anyone could formally recommend.
How many bedrooms are there? If there are only 2 then it would be difficult to retain the existing mortgage and allow your son's friend to move in. However, if there are 3 or more then that would be possible because you could theoretically move into a smaller room. You would need to charge the friend under the Rent A Room scheme and get money from your son quietly.
Mike
Posted on 07 March 2013 |
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39Wenders, I agree with everything Mike says and in addition, I suggest your son's friend should be asked to sign a Licence Agreement, specifying the rent he is to pay, but which will also make it much easier to get him to move out, if need be, in the future.
Posted on 09 March 2013 | Love 0 loves
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24You would also require Landlords insurance, your existing Buildings insurance would not be suitable in the event of a claim from your son's friend, I would budget for twice the amount of your normal premium
Alan
Posted on 09 March 2013 | Love 0 loves
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21You need do nothing if your son comes home to stay and his friend is renting a room in your home for less than $4,200 pa rent.
The question then becomes, when is your home not your home ?
Have fun.
Posted on 10 March 2013 | Love 0 loves
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878exportlink88's reference to £4,200 relates to the Rent-a-Room scheme, which I referred to in my previous post.
You should still consult your mortgage provider rather than 'do nothing' as (s)he said.
You are obliged to tell them if you are formally moving out, under the terms of the mortgage.
Mike
Posted on 11 March 2013 | Love 0 loves
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