Ms Ngan decided to come clean and tell Abbey she wanted to rent out her flat. Her subsequent experience will hardly encourage others to disclose such arrangements.
Ms Ngan bought her flat in south-west London in November 1989. She lived in it for two years before she got married.
She moved into her husband's house, which is in his name and on which he pays the mortgage. She has kept her flat - her only property - and continues to pay the mortgage. Ms Ngan said: 'The flat is my security for the future. I do not feel my husband and I will ever split up, but if anything ever happened it is there for me.'
In April 1991, she decided to rent it out on an assured shorthold tenancy, so that she could always get possession with the minimum aggravation. She notified Abbey of her intention to rent.
Ms Ngan said: 'They sent me a questionnaire which I completed. There was no problem. Every six months they sent me another questionnaire. I completed it. They charged me pounds 50 for authorisation, and so it went on.'
At the beginning of June 1993, she completed a questionnaire, sent another cheque for pounds 50, and thought that was the end of the matter for six months. But in September, she received a letter from Abbey that said the authorisation period for the letting had expired and asked her to complete another letting questionnaire.
The tenant had not changed and everything was as before. But Abbey's attitude changed. In a letter dated 11 November, it said: 'Before we can begin to consider giving our authorisation to the continued letting of the property, we will require confirmation that the property is up for sale and the expected sale price; or confirmation that the property is not up for sale.'
Ms Ngan considered this was harassment. She did not want to sell her property. She said: 'My mortgage has always been paid on time, I have never been in arrears, and I have been scrupulously honest with them as regards my intentions concerning the flat. I have always received authorisation to let the property. There was no timescale mentioned at the outset by the Abbey.
'I feel they are now trying to force me into a position to sell. If I had five properties under my belt, and I was called Rachman Enterprises, then I could understand it. But my flat is my only property. After all the outgoings that I pay on the flat, any profit I make from renting is minimal and is put back towards the upkeep.'
She wrote back to complain. She was even more taken aback by the response. Abbey said that completing the letting questionnaire should not be taken as our re-newed (sic) authorisation for the letting.
'If the property is not to be sold, then we would class it as an investment let. As this is the case, the interest on your mortgage account will be increased by 2 per cent.'
Ms Ngan feels intimidated by Abbey's attitude of sell up or pay up - in her case an increase of 25 per cent. She said: 'At the time of the letting, people told me not to bother telling the lender, but I wanted to do everything properly so that there would be no problems with insurance or anything else. Unlike thousands of other people I have told them the truth, and now look what has happened.'
An Abbey spokesman said that the lender had been more than reasonable in allowing the rental period for two years, and that it had reserved the right to introduce a premium on the interest rate. He said Abbey was in the business of lending to people who lived in their own homes, and not to landlords. He added that if Ms Ngan intended to sell the property within the next six to nine months, it would hold off charging the extra 2 per cent.
'If she has got the impression that we have been heavy-handed and have come in rather strongly then I apologise,' added the spokesman. 'We were trying to be reasonably flexible. We are a lot more helpful than other lenders.'
None encourage renting a property. The Halifax Building Society will only approve renting as a necessity, as in the case of a job move.
'We do not allow renting very often, in fact we frown on it,' a Halifax spokesman said. But it does not have an interest rate loading if you do rent.
Ian Darby, the marketing director of mortgage brokers John Charcol, said the Halifax was an exception. 'If a lender will lend at all on a property that is rented, then there is usually a loading. But lenders increasingly make it difficult if you want to rent. There is always the temptation for a borrower to keep quiet and not tell them.'
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