Every year, thousands of homeowners are forced into becoming an 'accidental landlord' for reasons such as they are unable to sell a property or have moved in with a partner and do not
For landlords renting out their own home, getting permission from your lender is what is referred to as obtaining a Consent to let.
Typically, if you have a mortgage on the property and it is not a buy-to-let mortgage, your lender may insist on providing you with a consent to let before you can rent out your property.
Here are some other organisations you may need to get consent to let from:
Your mortgage lender will have issued you with a contract when they lent you the finance to purchase or remortgage your property, i.e. your mortgage documents. The contract of lending usually implies that the bank will lend you the money to purchase the property on the condition that you have been able to prove your income and confirm that either you or your family will be living in the property as a home owner.
If you let a property without the proper consent from your bank, you may be in breach of your mortgage contract which could result in financial penalties such as:
The first step in obtaining a consent to let from your mortgage lender is to call them and discuss your options. We would suggest that at this stage, you are simply ‘exploring your options’ with the bank rather than suggesting you are trying to let the property out immediately, why?
Most banks will be reasonable and may be able to give you consent to let for either a certain period, i.e. 12 months or for a small fee. Other banks may insist on you changing your mortgage from a homeowner’s mortgage to a Buy-to-Let mortgage. This process can be costly depending on the new interest rates and the administration fees applied. The bank may even insist on running checks again.
Consent to let fees vary from lender to lender. At time of writing, here are the most common lenders consent to lease fees:
Most lenders are flexible when it comes to applying for a consent to let, however some restrictions may apply such as:
If you are unsure on how to obtain consent to let before renting out a property, we would advise that you seek assistance from a qualified Financial Advisor who may be able to contact your bank on your behalf.