Welcome to the trust deed forum millie28.

Could you explain what you mean by the "deficit" please? Do you mean that you think the flat will sell for less than the mortgage owing on it?

There is nothing to stop you renting out your flat and you can live where you choose during your trust deed.

You'll want to think about the financial implications of renting out your flat as it may have implications for your trust deed. If you make a profit on renting it out your trust deed payment may increase, if it were rented out at a loss it may make it difficult for you to keep up to date with the payments on your mortgage and/or trust deed.

Thanks for your quick reply Trust Deed Assistant. My trust deed company told me any profit I made from the sale of my flat would have to be paid to the debtors and that I have around £5k equity in my flat which also has to be paid back to them. I wasn't actually made aware of this until after I signed the trust deed. Anyway, I don't think there would be much profit if I rented it out but I will certainly take that into consideration and I probably wouldn't go ahead if there was a loss.

Hi millie28

The profit on selling and the equity are one and the same thing - it is paid to your trustee, who will then share it out amongst your creditors

Thanks Kevin, this was never properly explained to me.

Yes I figured. Basically the £5k equity was an estimate of how much profit you would be likely to get from selling, so if you decided that you didn't wish to sell the property then the £5k would have to be paid over instead, either by a 3rd party or by extending the term of your trust deed usually.

So if I sold my flat when the trust deed ends I could pay the £5k from the sale, if I made enough profit?

No, the trust deed wouldn't end until you had either paid over the £5000, or sold the flat and paid over all of the resulting profit. You couldn't sell the flat, pay £5k to the trustee and keep any remainder for yourself.

Ok thanks for clearing that up Kevin.

Clearly renting the flat out is an option if you have elsewhere to live with partner. Life doesn't get put on hold just because of a trust deed.

Paul

Please do take time to get a realistic list of costs together for renting the flat too.
There are the variable aspects such as mortgage payments(unless fixed rate applies)and empty periods ie no income.
There are fixed costs such as insurance, landlord registration, safety certificates which are not optional and remain as costs even in the months you have no tenant.
As a rule, count on 10 months rent and count your costs as being your mortgage plus 25%. If you have a high loan to value and the rent achievable barely covers it, it will cause you to be short if you have periods with no tenant, not to mention the liability for council tax if a void period is lengthy.

Should have said, in the above comment. I assumed you would be self-managing the marketing and tenancy etc. If you need/want to have an agent do this, the cost can range from 8% -15% of the rental income.