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Can I Rent Out My House?

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Many people ask themselves: can I rent out my house? You can if your mortgage lender says yes. It’s not quite as simple as just becoming a landlord, there are some rules you have to follow. What are the ins and outs? We share everything you need to know. 

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Are you looking to rent out your home?

There are many reasons why someone may look to rent their home. 

You might be moving temporarily for work, it may not be a good time to sell, you may not want to part with your property just yet, or maybe you’re moving in with a partner and aren’t ready to sell up.  Or, are you simply looking for some extra income?

Whatever the reason, if you have a mortgage, it’s important to get clued up about what you can and cannot do.

Can I rent out my house on a normal mortgage?

You’ll need to contact your mortgage lender to find out if you can rent your home. If you have a mortgage on your property, you must get permission from your mortgage lender. If you don’t, you’ll be committing mortgage fraud.

What is ‘consent to rent’? 

This does what it says on the tin: it’s where your lender grants their permission for you to rent out your home on your current mortgage. It will usually last for a set period of time, e.g. until your fixed-rate mortgage comes to an end.

When deciding whether to give you consent to rent, a lender will look at:

  • How long you’ve been on your current deal
    • If you’ve just bought the property, they’re less likely to say yes
  • How much equity is in your home, you’ll likely need a decent amount, e.g. 25% of your home’s value
  • Your income (you’ll need to be earning a certain amount)

If you’ve bought using Help to Buy or a similar scheme, it might be tricker, as there are different rules surrounding these properties.

Is it temporary?

If you’re looking to rent your home out temporarily (e.g. 1-12 months) your mortgage lender may give you consent to rent. But, don’t assume, always ask. 

Is it long-term? 

If you want to rent your home out for a longer period of time, or permanently, you likely won’t be able to stay on your current mortgage. This will also be the case if your lender doesn’t grant you consent. 

You’ll need to switch over to a new mortgage deal, likely a buy-to-let mortgage

It’s worth speaking to a mortgage adviser to help you find the best deal. We can put you in touch for free.

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Can I rent out a room in my house?

Not looking to rent out your whole property, but get a lodger instead? While things are somewhat more relaxed, again, you’ll need approval from your mortgage lender – better to be safe than sorry. 

You must also tell your local council if having a tenant means you’re no longer entitled to a single person discount on your council tax.

You’re a ‘resident landlord’ if you let out part of a property which is your only or main home. You can charge what you want for rent but should agree the amount with your tenant beforehand – they don’t have the right to challenge it. 

The Rent a Room Scheme lets you earn up to £7,500 per year tax-free for letting out furnished accommodation in your home. (This is halved if you share the income with your partner or someone else.)

What about holiday lets? 

Letting out your home for holidays can be a lucrative way to make money from property, however, again, there are rules involved. 

If you only occasionally rent out your property or part of your home (for example through short-term rental apps like AirB&B) you may need to declare this income to the HMRC – always check. 

Again, you’ll need to check with your mortgage lender if you’re considering going down the holiday lettings route to see if you’re allowed. Always get permission before you list the property.

How do I rent out my home?

Wondering how to rent out your house? Even if your mortgage lender gives you the go-ahead, there’s a lot to consider when becoming a landlord. It’s not as easy as it might sound! Some of your responsibilities will include:

  • Maintaining the property properly (keeping it safe and free from hazards)
  • Providing an EPC 
  • Making sure all gas and electrical equipment is safely installed 
  • Ensuring your tenant has the right to rent 
  • Protecting your tenant’s deposit in a government-approved scheme 
  • Fitting and testing smoke and carbon monoxide alarms

Need a mortgage adviser?

If you need to switch mortgages, it might be a good idea to speak to a mortgage adviser. They’ll be able to help you find the best deals out there, one that works for you. Get in touch for free below.

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Last Updated: December 20th, 2021