Hi I wonder if anyone could give advice on the following please. A few years ago my girlfriend and I bought a London property together, with the help of a 95% mortgage. We are now moving abroad and want to rent out the property. Must we inform our mortgage company? I'm aware this is a grey area, and I wondered if anyone could cast any light on the potential pitfalls of not telling them please? ie if there was a problem which needed to be covered by landlord insurance, would that insurance be void if we hadn't done everything by the book etc etc? Any advice gratefully received. Thanks Dan

Hi Dan You must tell the mortgage company. You may have to pay a little more than on a standard residential, but try shopping around too. Also, if you have not got it already you must get a specialised landlords insurance policy that cover a let property -a normal insurance policy will not do as it will not cover the kind of risks common in letting. Rentguard and Hamilton Fraser are two brokers that arrange good landlord policies with reputable insurers. Good luck David Lawrenson

Hi Dan, It may be an ideal time to look for a remortgage on a seperate if you have gone back to the SVR lets say! One of my friends had a horror story when they didnt inform the mortgage company befoer letting out a flat. The comp found out and threatened to call in the whole loan!! let us know if you need a hand with this? Regards Singh

Thanks for this guys. Alas we're on a fixed rate until the middle of next year, which has been good up until now, but has stinging penalties if we want to get out before then, which doesn't help our desire to shop around now. I'll have a chat with my mortgage company and see what the options might be. D

I hope the above posts are honest advice and not just a chance for a bit of marketing?!!! Beware of people who give their website after telling you what you should do.

Technically not informing your mortgage company of a change in circumstance is fraud and could cause you to wind up in court. However, the chances of this happening are practically nil as there is no reason for, or benefit to, the mortgage company to do this. If you are confident that the mortgage will not go into arrears, there is little risk of the mortgage company finding out. Also, as far as I am aware, the status of your mortgage has no impact on any insurance policies you take out, so as long as you have a Landlord insurance policy you will be covered. So if avoiding the likely 1-1.5% increase in mortgage costs is important to you, you may wish to forget to inform your mortgage company and take the risk of being caught out. I would not recommend anyone lies to get a mortgage in the first place, this would be much more risky and really could end up with you in court. Another big no no is attemping to save money by relying on a standard household policy. If you make a claim of any significance an adjuster will visit, find out the property was tennanted and reject your claim. Don't think for a minute you will be able to pull the wool over the adjusters, they often earn a large commission for rejecting invalid claims and will spot a tenanted property the moment they walk in the door.

In addition to what everyone else has said above, take a look at the article I did on acquiring necessary permissions to let (Search: Subject To Contract), which covers a couple of other matters in addition to obtaining mortgage company authority. Also, if you are moving abroad, you will need to join the Non-Resident Landlord Scheme to ensure compliance with UK taxation rules. Check with your local tax office for guidance brochures and a forms pack or visit them online.

Hi Dan Just to add a further negative - if you are going abroad I assume you will need to use a good letting agent to let and manage the property for you. If so it is worth having a look at the agreement you will sign with them - they usually ask for evidence that you have the mortgage company's permission to let the property and the contact details of the company, they won't let it unless you fulfill this criteria. - wouldn't want you to get to that point and then find you were in trouble. Jo

Many thanks for all this advice folks. Dan

David In the case of a leasehold property, where the Freeholder arranges the buildings insurance, does the leaseholder renting out the property (after living there) have to arrange additional insurance? You mention specialised landlords insurance - can you clarify this further please. Thanks Anthony