NRAM - No Consent to Let; any advice?

[Maz75]

Dear all

 

I have just joined this forum in the hope I can request for some advice on my current situation. I have an NRAM together mortgage on a property bought in 2005. The mortgage is £99,500 and the unsecured loan is £23,500 outstanding. My property is in Stoke on Trent where house prices are slow to rise.

 

The last valuation I have had shows the house to be wroth round £97-99k. In 2007, two years into the mortgage, while it was still with Northen Rock and before the crisis I was offered a job in London. My salary increased from £32k to £50k. I requested Consent to Let but this was denied. I nonetheless went ahead with the move to London and rented out the property.

 

I understand that this was a risk, in breach of my mortgage t & c, and in the high spirits of the time when we felt the bubble would not burst I decided it was a risk worth taking; especially as my salary would offer greater security in my maintaining my repayments. Needless to say, I have never missed a payment, before or since,

 

I supplement to mortgage (the rent I receive is £500 and the mortgage payment is £675.) I am not seeking to justify my decision, I knew I was in breach and I knew that I was taking a risk. I have landlord's insurance in which I told them I did not have consent to let and they said that would not affect any potential claim (now, whether that is true or not I cannot say in fairness, but I did ask.)

 

Ok, so 7 years down the line, I am still in London, renting and still unable to fulfill NRAMs criteria to be granted consent to let; have not checked with them specifically, but going with the broad evaluation in terms of rental ration to mortgage, which is what they asked their decision on in the first request I do not believe I would be granted it.

 

Unfortunately this has meant that annual statements are delivered to my stoke house and last year my tenants returned to sender not forwarded on to me (one of the other caveats of risk taking alas). I am now flagged on NRAM's system as a potential mortgage holder who is renting without consent and I also know that their remit, and incentive is somewhat different to a mortgage company; so that if they can find you are in breach of your mortgage conditions they will take rather severe and unforgiving action.

 

I spoke with them on the phone about why the mail had been returned (lied and said it was due to a postal error). They clearly don't believe me for they have asked me to send them a letter with a utility bill to confirm I live there before they take whatever flag they have put on my account.

 

I want to get an exit strategy in place before I come clean with them as that may leave me with a very limited time frame. Even though the unsecured part of my loan would quadruple in interest once it's decoupled from the mortgage, I am wondering whether it may be time to sell the house and cut my losses? If I'm on NRAMs radar as it were, then when they find out I'm in breach I am unsure as to what my options will be then.

 

I have no problem accepting the fact that I chose this mortgage; I am and have been making all my payments on time and moreover accept the fact that the unsecured loan will cost me much more when I sell it.

 

My anxiety is if I can sell it before NRAM find me out, if my options are significantly reduced when they do, if I am facing a prison sentence for fraud (all outcomes I hold my hand up to - I do accept any repercussions of my decisions), but I'm trying to gather as much information as I can to at least try and make some better decisions in the future. Any advice you may have for me will be gratefully received. Many thanks

[Magma man]

This might well be a silly question but can you not apply to another lender and ask for a buy to let mortgage?

Given that you can show that you have already had a mortgage for seven years and your wadge is sufficient for this type of product would this not resolve the issue?

[Maz75]

Unfortunately the house is worth around (97k which means the LTV is not sufficient for a BTL.

 

I do not have the income to put a deposit, no parents, no partner and 2 credit card debts to account for so I am unable to move.

 

I am also on a standard variable - though that is fine for the time being given the interest rates are low, but of course, they can only go up. I can afford the mortgage if they go up to a point - I could afford max £900pm.

 

But sadly I cannot move to another mortgage, transfer the mortgage to a new property, say if I wanted to buy in London instead or get a BTL.

[Magma man]

If I read this correctly the real issue is the Credit card dept if it has missed payments?? If not you might still have options that are less painful although it would be more of a private conversation.

 

Regards

[Maz75]

No payments have been missed - I fear that the breach alone would be sufficient for them to instigate a repossession - I am very mindful that their aim is to get us all off their books as soon as possible, and this will give them sufficient cause irrespective of the account status. I have made all my payments for 9 years, never late, never been an issue. Still I suspect that this will be enough for them with no room to negotiate. I am bracing myself!

[hran]

Hi - I am currently in a similar situation to you and have no idea what option is best to take.

What was the outcome for you?

Thanks

[Entity1319]

Hi all,

I am also about to attempt to go down this route. My ex partner and I bought our house in 2005 interest only 100% mortgage including unsecured loan. We have split up and been renting it out and I didn't realise we needed consent to let. Please let me know how it turned out for you?

[Maz75]

Hello there - the outcome i ended up was one that was right for me, so please take my summation with that in mind. I had a house in Stoke on Trent - the value of it had gone down in the 9 years I owned it;

 

moreover with the fact that it was based in Stoke I was pretty sure that even if I was able to keep it for the 21 years left outstanding on my mortgage, I would have ended up paying over £400k (at interest rates remaining as low as they are, which is to say the least, unlikely) for a house that will only ever be worth about 150k at the most - current value is 80k.

 

With this in mind, it was financially beneficial for me to hand they keys back. I did not live in it, and I did not have much to lose apart form a big debt - by handing the keys back I then contacted Unity (other insolvency practitioners are just as good/available) and I arranged an IVA.

 

The IVA was agreed in September. I make one payment every month (which in my case was lower than my mortgage payment) for the next five years. Anything outstanding is wiped off.

 

Your credit rating takes a hit; you are not allowed to borrow any money, have credit cards etc. If you do go down this path make sure you open a new bank account beforehand if you have an overdraft with your current account.

 

The credit rating hit was not an issue for me as I can live within my budget now that the IVA has been agreed, and I am not looking to buy a house in the near future. It is not a solution for everyone, but for me it worked out. And ironically, saved me from throwing lots of money into a property that would never make it back - that is mainly due to the house's location. If it had been in London then it would be a different story. Happy to provide more information if you guys need it.

 

One quick note: before you do anything contact an insolvency practitioner - they will be able to give you advice on all options available not just IVAs; this way you can arm yourselves with as much knowledge as possible about all the options you have and come to an outcome that best suits your situation. Don't sit on it, the sooner you deal with it the sooner it is off your mind and you can get on with other things in your life.

 

My IVA took 4 weeks to go through. Then the stress and all the calls, letters and aggravation were over.

 

Even if NRAM had not forced this situation on me it would have been the financially beneficial thing to do, so in a weird way I am glad they forced me to deal with the house, otherwise I would have carried on paying the mortgage, dealing with tenants etc, blindingly for the next 21 years, wasting an enormous amount of money. They accidentally did me a favour. (Not that this makes me favourable towards them in any way...)

[Sir D Whittington]

Hi,

I'm currently in a very similar position to yourself in respect of this situation. Looking for as much information as possible before approaching NRAM.

 

Please could you PM me any further information you have on this please?

 

Thanks!

[dx100uk]

threads +2yrs old

and you cant use PM below 30 posts

might be better to start a new thread

[Maz75]

Sorry I can't PM - but happy to help - what do you want to know?

[Entity1319]

I sold the property before going down the route of informing NRAM.