Property let. interest claim.

[ASB]

I am starting to let a property. It has a mortgage with a facility of 130k. Balance is 45k. Obviously I can claim the interest charged.

however if I draw some on the mortgage, which I just use as personal funds, can I claim the increased interest?

I appreciate that if I drew the 85k now it would be ok. The debt at the start of letting would all be chargeabl. But what if did it later?

The 85k will probably be needed in a few months, and I would rather wait till then.

[eek]

As you are just letting it I assume it was your main property. Have you told your lender?

[ASB]

As you are just letting it I assume it was your main property. Have you told your lender?

No. When I find out if they have no problem with permission to let I will tell them. If it turns out they do I won't.

[northernladuk]

No. When I find out if they have no problem with permission to let I will tell them. If it turns out they do I won't.

Lenders crack down on 'accidental' landlords

Although saying that there are millions of people asking what they should do. Can't find any evidence of the worst case happening.

I don't think you will have any problems with a consent to let. Might cost you about 120 quid though.

[SueEllen]

No. When I find out if they have no problem with permission to let I will tell them. If it turns out they do I won't.

If you receive mortgage letters through to your property - which you will - don't be surprised if you get tenants who inform the lender.

Remember there are more and more people who can't afford to buy their own home so if they are unhappy with the landlord in any aspect they will dob the landlord in any legal way they can think off.

[TheCyclingProgrammer]

This is purely anecdotal and I can't find a link right now but I did see somebody raise this scenario on the MoneySavingExpert forums and the consensus was at if you draw funds from your mortgage for reasons unrelated to your letting, then the additional interest cannot be offset against the rental income, which makes sense if you think about it.

Your accountant must know?

[northernladuk]

Won't this need accounting for carefully with a baseline being setup at the start of the letting period. What you do would depend on this baseline i.e. drawdown before or after.

If you just take out 85k midway through you profit when you come to sell will be considerably less so paying less CGT on it effectively getting the 85k tax free?

[ASB]

Lenders crack down on 'accidental' landlords

Although saying that there are millions of people asking what they should do. Can't find any evidence of the worst case happening.

I don't think you will have any problems with a consent to let. Might cost you about 120 quid though.

Fully aware of that. I have 75!% equity In the property and a lender which has no interest in any form of btl. In any event I have a decent mortgage rate.

also I could use other funds I have to pay off the mortgage. I have a lot of flexibility how I allocate funds. At a current effective cost of 1.6 I am happy to have funds on deposit at a higher rate and carry the debt.

[ASB]

If you receive mortgage letters through to your property - which you will - don't be surprised if you get tenants who inform the lender.

Remember there are more and more people who can't afford to buy their own home so if they are unhappy with the landlord in any aspect they will dob the landlord in any legal way they can think off.

I dont receive any post related to the mortgage. It is all on line. In any event post will be redirected.

[ASB]

This is purely anecdotal and I can't find a link right now but I did see somebody raise this scenario on the MoneySavingExpert forums and the consensus was at if you draw funds from your mortgage for reasons unrelated to your letting, then the additional interest cannot be offset against the rental income, which makes sense if you think about it.

Your accountant must know?

I dont have an accountant.

my recollection from the old schedule a regime is that the mortgage at the start of letting is the limiting factor. But im not certain and have not beej abpe to find anything definite.