Consent to Let

[westwoap]

Hello, Im new to the forum and letting and was hoping you could help.

I have a mortgage with Northern Rock and have asked about letting. They want me to go with an apporved agent (ARLA Registered) but my friend owns a successful letting company but not registered. I was thinking of just not letting the mortgage company know im letting it out to save on agency fees etc. WOuld there be any repercussions from this? any advice would be greatly appreciated

[Mortitia]

Why bother asking Northern Rock for advice and then go against what they say? Any fees you pay the agent will be tax deductable and you should pay tax on this rental income.

Since you are a novice at lettings why use an agent because they are a friend (bet you won't be for long) and not ARLA registered. This site is full of posts from people who have had bad experiences with non- registered agents. I am not the biggest fan of ARLA but at least you have some back up with an agent who is ARLA trained.

Don't do it!

Mortitia

[westwoap]

Thanks Mortitia,

On the subject of Tax, If my rental is less than my mortgage do i need to pay tax?

[Chestnut]

You need to ask your office of Her Majesties Revenue and Customs (HMRC).

HMRC requires you to declare your gross rental income, outgoing expenses, including annual items such as maintenance, insurance, and any mortgage interest payments, and hence net profit (if any)from your rented property on an annual tax return, along with all your other earnings.

You need to fill out HMRC 'rented property' page for your tax return (page and notes downloadable from HMRC website).

HMRC will then inform you what, if any,(extra) tax you may need to pay on account of your rental.

As with your mortgage company, you are obliged to inform the tax office about your rental business.

[Melboy]

It is a condition of your mortgage that if you rent out your property then you MUST inform the mortgage company and insurance company. If you don't then these 2 things will probably happen.......

Your house insurance becomes invalid in the event of any claim.....failure to notify them of a change of circumstance.....and....NR will call your mortgage in and as it happens I know of a case wbere NR have actually done this to one of their mortgage holders.

Never but never go with a "friend" when renting out your property. Will you be banging his or her table when things go wrong? They invariably do when dealing with close friends in my experience.

Mel.