Q: I have a two-bed house, which is solely owned by me. I live with a lodger who is one of my closest friends. My mortgage still has another eight years to run. However, with the savings I’ve got I could probably clear it in two years. I had intended to do this and then go travelling.
However, I’m utterly sick of my job and want to go travelling now. I think I could probably afford this by living off my savings, with the money I’m receiving in rent paying for the mortgage while I’m gone.
But I’m struggling to work out if this is allowed. If I was gone for six months would my lodger still be a lodger, or would he be classified as a tenant? It would still be my main (and only) address, all my stuff would be there, I’d get post delivered there, and still be the main bill payer (including paying council tax as if two people were in the house).
I can find very little information online about how long a landlord could be away in this situation. I’m aware that if the bank classified this as me renting out the house, I would need a buy-to-let mortgage, but it seems a lot of hassle for six months away. I’m a bit wary of telling the bank that I am thinking of changing my circumstances so dramatically unless I decide definitely to do this. I also know that I’d have to check my insurance carefully, and have someone who could sort out any problems that arose with the house. EW
A: The first thing to say is that whether you go off travelling or not, you should have already told your mortgage lender you have a lodger, as well as informing your buildings and contents insurer.
You are right in thinking that your insurer will also need to know if you do go ahead with your travelling plans, but the fact that you have a lodger could actually work in your favour. Most house contents policies have a clause that says if you leave your home unoccupied for more than 30 days, you won’t be covered against theft and/or damage. However, as you have a lodger, who would effectively be acting as a house sitter while you are away, you may not lose cover against theft and damage even though you’ll be away for more than a month.
As to whether your plan to travel for six months would make you a live-out rather than the live-in landlord that you are now, I don’t think it does. You are considered to be a live-in or resident landlord if you let out part of a property which is your only or main home. Going off travelling for part of the year does not alter the fact that your house is still your only home. So there’s no need to convert to a buy-to-let mortgage as, even in your absence, your lodger is still your lodger.
To become a live-out landlord you would need to move out of your home, get a new permanent address and stop being responsible for paying the council tax at your current address. Also, to become a tenant, your friend would have to have a formal tenancy agreement, which I’m assuming that he/she hasn’t.
