I was in the same situation. My husband and I bought a house three years ago but it took so long and our relationship was fragile anyway so by the time we'd been through all the hassle of trying to get a mortgage on my stipend etc we actually split up a few months after moving in. We lived there together but separate lives for a while and then we both met other people and I moved in with my boyfriend. I didn't want to sell the house because I saw it as an investment and we were tied into a three year fixed rate. So we thought we would rent it out. The letting agent was great but then I got the same as you from the mortgage company saying we could not let it out. I'd already paid money to the letting agent but they refunded it and were really nice about the whole thing.
So I went down the renting out privately through spareroom.com. Initially my ex hubbie was still living there so we rented out the other room. Unfortunately the first two tenants ended up messing me about and one left owing two months rent. But I know have a lovely Bulgarian couple living there and they always pay the rent on time. My ex has now moved out but is still paying his share of the mortgage. I can't get hold of him so as there is now a free empty room I am actually going to stay there when I am up at uni, as I live with my new partner 200 miles away.
It's all pretty complicated, but basically I'd say rent it out anyway and hope that the mortgage people don't find out. If you make sure you keep that as your address with them and make sure you pick up any post from them then how are they going to know that you aren't living there. How many mortgage companies check up on people?

Be very careful, both with the insurance people and the mortgage lenders. I ended up having to move out very fast a few years back when the mortgage lender found out that the property was let and they hadn't been informed - they immediately foreclosed on the mortgage and the house was repossessed as a result. As the thing wasn't gone through properly the buildings insurance was invalid too - its a minefield if you don't go down the proper channels. I have no idea how they found out but all I can think is that maybe they were alerted through a paper trail - ie that it was 'my' address on all the state and legal business - ie tax, NI, DVLA, bank etc etc and it shouldn't have been for obvious reasons that I had no idea about. It didn't occur to me that it wasn't kosher and that to protect the landlord (this was through an agency) I should have lied about my address to all and sundry for 2 years!

It sounds like an awful situation, rock and hard place come to mind, but be ultra careful about entering into any form of tenancy unless its all above board - I found out from the tenant's side what can happen in that situation and I was out on the street with 2 kids for no fault of my own so we all lost out - the owner lost the house, I lost my home :-(

Oh no, Stressed, that must have been terrible. :-(

That's why I was suggesting short term lets to friends/friends of friends only as a last resort. If it's not above board, you shouldn't have people registering to vote etc. unless they're declared tenants.

If you're friends with any theatre folk, for instance, they'll always have friends in need of digs for a week or two here and there...

Ubu, Stressed and Pamw,
Thanks for your comments. Stressed, that's an awful situation. I got evicted when I was 16 after my parents fell into arrears with their mortgage (complicated situation), it resulted in bankruptcy and my parents split up as a result. I don't want to do anything to piss off a bank. There are just way too many databases for everything (mobile phone bills, council tax, electoral roll, tv license, insurance) that if someone shows up too many times in some place they're meant to be, that's it. I do quite like the idea of renting to theatre folk though. Especially as it's within an hour of Edinburgh. Other than that, there is a possibility of re-furnishing it and letting it out as a holiday home, but I think the tax situation becomes quite complicated.

On Wednesday we will find out if we will be allowed to rent the second place whilst paying for our mortgage. We were supposed to be picking up the keys on Friday so it's all very last-minute. If we get turned down, I don't know what we'll do -- living with family is already difficult.

I only realised last night how much the stress was getting to me. I didn't achieve any real work last week, and I've been incredibly wound up this weekend -- inexplicably angry, emotional, and unable to sleep. Then I try to relax and I'm fine.

On one hand I think it might be alright, that we will manage on a shoestring for another few months just like we've done before, but on the other I am just so annoyed that this has happened just a few weeks into my PhD. Still, several of my friends are in identical situations (albeit not with doctorates) so I think it's just society and the economy. I'm waiting for that to make me feel better...

If you really like the theatre idea, PM me. As luck would have it, Edinburgh's one place where my SO (his world more than mine) has lots of theatre contacts, and we could point you in the right direction for informal digs lists. Might be worth a try. Keep on keeping on tho. It'll all come out in the wash, as they say. x

You'd be very surprised. The question you should ask is how many don't.

You've got me worried now! But if I am going to be living back in my house occasionally, hopefully if they do check up then they will see that I am living there.

Thanks everyone, it was pretty darned awful at the time, especially as I had no idea that the house wasn't a Buy to Let and that this could happen :-(

PamW I'm sure you'll be fine, the only problem will come in if they see another person registering it as their address for any length of time - I'm not sure of course if its something they do regularly or if its a spot check type thing and my landlord was unlucky - electoral role is a biggie as well obviously. Do be careful with your buildings insurance though - check the terms - if you aren't supposed in it to be letting or sub-letting then if anything happens you won't be covered. It should state it quite clearly in the terms and conditions of the policy. Its something I made my current landlady check out lol - sure enough (no mortgage so no problem that end) her insurance was just the normal type and would have been totally invalid as we are letting from her.

Cornflower, i do hope you have good news on your house - talk about cutting it fine! That would drive me to drink not knowing where I'd be living this weekend!