letting basment flat in home as residential or holiday let

[dc5]

Hi

I'm new to this forum, so any help would be really appreciated.

Im considering buying a house in somerset which has a basement that could easily be used as a basement flat - I am looking to let this either as a normal residential let, or as a Holiday let.

The main house would also be let out for about 12 months before I move in as I am currently working out of the area.

I want to get a standard residential mortgage on this if I can, some lenders are doing 15yrs fixed at 4.98% which would be great, and also give me some security in knowing payments are not going to fluctuate as the mortgage is going to be quite large.

I'm planning on buying this then going for a Consent to Let after the deal. Does anyone know which lenders offering long term fixed rates are likely to go with this?

How about insurance? I would of course tell the insurers the basement would be let in case the place burns down!! But, I have also read on various web sites that unless you have Consent to Let the insurance, regardless of wether the insurer is also your mortgage lender, would be invalidated, can anyone shed any light on this issue? If "consent to let" was not likely to be granted I would consider not telling the lenders, but if this could really invalidate the insurance this isn't a good option!

Taken from http://ezinearticles.com/?Choosing-Buy-To-Let-Property-Insurance&id=14209
".....
It is worth checking the policies of each insurer as the perils covered may vary. Other issues to be aware of are the amount of money the insurance company will pay out in the event of damage occurring, types of tenants (student tenants are perceived to be higher risk) and consent to let from your mortgage lender, as failure to gain consent will render your insurance void in the event of a claim......"

Thanks in advance for any thoughts

[SteveP]

I have also read on various web sites that unless you have Consent to Let the insurance, regardless of wether the insurer is also your mortgage lender, would be invalidated

As with any insurance, if you fail to tell the insurer about anything which may be relevant you risk them refusing to pay any claim you make. Insurers base premiums on complex risk calculations. So, for example, statistically properties which are owner occupied are less likely be damaged by fire and consequently premiums may be weighted to reflect that risk.

Bottom line is that not being honest is a very risky thing to do.

[dc5]

Hi Steve

Thanks for your reply.

I understand that I would need to be upfront with the insurers, but how up front do I need to be with the Lender. I have read that if you don't have a consent to let from your lender, but have notified your insurers that the property is let, that the insurance could be invalid. I'm trying to discover if that is actually true...

Dave