Will UKAR let me switch to BTL?

by Readers Question

12:06 PM, 2nd November 2015
About 6 years ago

Will UKAR let me switch to BTL?

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Will UKAR let me switch to BTL?

I have a 3-bed in central Birmingham that has a UKAR mortgage of around £250,000 set at 0.5% above the base rate apparently in perpetuity.stuck

I’ve weathered the storm for the last ten years and the value of the property has risen. This is the only mortgage and the only property I have.

However, for personal reasons I now need to move out of the house. My financial circumstances have changed since taking out a huge self-cert many years ago…

Under my current mortgage conditions, it seems crazy to rock the boat. I’d like to take on some tenants, and ask UKAR if I can switch to a BTL mortgage. There’s enough potential in the house for income that it wouldn’t be a problem to do this at all, in terms of making the mortgage payments.

But having read the various horror stories about how UKAR operate I’m scared that if I ask, they’ll either say “no” and then watch closely to see what I do, or that they’ll say “yes” and then wait eg a year and then retract their permission. (That’s what I’d do, if i was wanted to clear my book of mortgages!)

I suppose I could just proceed without asking their permission, which would result in a decent amount of income, which I’d then declare to HMRC as I have no intention of breaking the law re tax! If I were to do that, would UKAR be able to find out from HMRC that I was declaring an income from property, or would that information be private?

Does anyone have any experience of how they might operate in this circumstance? Am I being too cautious by not asking, or am I right to assume the worst?

Gary

Comments

Luke P

21:28 PM, 7th November 2015
About 6 years ago

Reply to the comment left by "L Silver" at "07/11/2015 - 09:33":

IF they agree to a 'permission to let' then it will very likely come with a specific time limit with no real possibility of any extension. People used to do this quite a lot, extending the permission over and over until lenders figured out people were using this tactic as a pseudo-BTL loan (which they didn't much care for because a proper BTL will almost certainly come with a higher rate).

Having said all that, if they do grant it (even with a short expiry), it gets you out of a jam for now and buys you some time.

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