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  • Buy-to-Let

    Need help on a terrace 2 down and 2+1 up

    Hi,

    This is my first time posting and i hope you could help, i am currently in the process of buying a 2+1 up and 2 down mid terrace property in RG1. Im planning to make it 3 single let-table rooms with a generous living area, my questions are;

    Do i need a HMO licence as 1 of the rooms i will be a live in landlord?

    Im getting a residential mortgage, would i be covered to let these rooms put?

    If someone could get back to me that would be appreciated.

    Kind regards,

    Oscar.

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    I'm not sure what you mean by a 2+1 up, is this a 3 bed or a 2 bed?

    If you are living in the property you will be a resident landlord and can have up to 2 lodgers without requiring an HMO licence. Please note that the limit is 2 lodgers, not 2 rooms.

    Most residential mortgage providers are happy to allow lodgers, but you should check with your lender before you proceed. You will need to ensure that you have appropriate insurance for lodgers as standard home insurance will not be sufficient. Make sure you understand the difference between letting to lodgers on a licence and creating a tenancy. In my experience, lenders don't like the latter.

    You can receive up to £7500 pa tax free under the rent a room scheme.

    A few links below to get you started:

    https://www.gov.uk/government/publicatio...-landlords

    https://assets.publishing.service.gov.uk...138292.pdf

    https://www.lodgerlandlord.co.uk/

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    So this is a basic 2 up 2 down terrace but with a rear single storey extension - latter being where kitchen/bathroom are located?

    So there are 4 other rooms - 2 on each floor - and you will live in one of those 4 rooms - so where is the large living room you mention?


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    You could let three rooms and live in another but then it will be an HMO. Depending on your local area, it may not be a licenceable HMO but you will still need to comply with some HMO regs such as fire alarm and fire doors. You could still claim the rent a room allowance.

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    Lodgers are easy, HMOs are much more complex. My experience is most lodgers have girlfriends/ boyfriends "stopping over" friends "crashing" or "sofa surfing" and relatives "visiting". My view is that's fine if it doesn't cause a problem but get it documented and signed off before they move in that its not allowed so you can't get slammed for running an illegal HMO retrospectively.

    The trouble with a lot of lodgers is they move in with no formal agreement.

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    Agreed but usually you can remove lodgers with 1/2 weeks notice - so if they start emulating the Pied Piper when they come home you can get rid.

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    Hi All,

    So yes it is a 2+1 mid terrace house, my plan is to make a corridor the the plus 1 and turn this into a bathroom. I would then go into the loft to create the third room, so two rooms would be on the first floor etc.

    The downstairs would be a big reception/sitting/dinning room and kitchen where it is now located (staying same place) and a small toilet at the back.

    So im guessing from what i have read here; I can rent out to rooms to lodgers with needing a HMO license etc. I would need to take into consideration things like; Mortgage, Insurance and regs if applicable.

    would this be right?

    Kind regards,

    Oscar

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    Loft extension in a ? small terrace would usually lose at least part of one of the 2 bedrooms on first floor - for the extra fixed stairway - plus a substantial 5 figure cost to do it properly.

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    My first house was a very similar arrangement. It was a 2 bed terrace with upstairs bathroom and a large lounge/diner with a kitchen extension at the rear. I added a velux window to the already boarded loft with drop down ladder and used it as my bedroom. There are many regulations that will state you can't rent a loft space but as an owner occupier you can sleep where you choose! The loft was also a nice private space in a shared house, and on a sunny day I used to climb out of the velux and sit on the roof (not that I would recommend that).

    I would suggest your main priority is getting the correct home insurance, and a CP12 gas safety certificate, presuming you have gas. You should inform your lender and I would recommend you let the rooms on a licence, not a tenancy. There are a few finer details, but that covers the basics.

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    Hi all again,

    Yes i belive i will spend 20k in total but i getting the propoerty for £225k so in the area it is and the stardard i will complete it in it will have a small bit of profit i would say.

    I do like the idea of making it a storage space and ultimatly living in it myself etc as this is what i want to do. As i only really see myself living here for 2/3 years i want the two

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    extra rooms to help towards the mortgage etc. I am glad with all the response i have had so far from everyone and it is much appropriated.

    If i do go a head and run into any problems i shall let you all know Smile

    Kind regards,

    Oscar

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