Do you need Consent to Let for your mortgage?
If you live in a property and have a residential mortgage on it you should inform the lender if you intend to leave and let the property out – this is called asking for ‘consent to let’.
Often, if you let your current property and look to buy a new home using a new mortgage your lender will ask for confirmation that you have ‘consent to let’ for the mortgage on the original property.
We rarely see situations where lenders refuse consent to let, but providing consent is a decision for the lender at the time and not a contractual right written into the terms of your mortgage.
One typical situation where consent to let may be refused is if your mortgage account is in arrears.
Where consent to let is granted, the lender will usually apply an administration fee, or put a loading on to your interest rate, or both. They justify this on the basis that they have lent to you on residential rates to allow you to buy your home. If you are now letting, the property becomes a revenue generator and this is a business proposition. Lenders would charge more for this type of ‘buy to let’ mortgage.
What if I get a no?
If your lender refuses to provide consent to let you may wish to consider re-mortgaging your property onto a buy to let mortgage. If your lender says ‘no’, call us now on 020 8979 9684
Remember that you will generally find that the terms and conditions of your mortgage state that you need to obtain written consent from your lender before letting your property. If you let without permission you would breach your mortgage conditions and your lender can take action which could include repossession.
Here is our understanding of how some major lenders currently handle consent to let requests.
Please note that each case is handled on its own merits and these notes are intended as a guide only
Barclays
Consent to let can be granted for up to two years. Although they do not tend to levy costs or fees, Barclays give consent to let for a fixed term if you are moving away for a fixed period.
If you are letting with a view to buying a new home, consent would not normally be granted.
Clydesdale Bank
Consent given for up to 2 years – £100 admin fee and 1% rate loading
Coventry Building Society
Consent to let can be considered after one year with Coventry, your interest rate is loaded by 1%
Halifax
If the borrower is on a mortgage product, Halifax will allow the product to run it’s course on a consent to let basis.
If the borrower is on Halifax standard variable rate they will need to take a consent to let product (which is often priced more competitively than buy to let rates)
Consent to let on mortgages over £500,000 needs to be approved by a Manager.
Nat West
We are not aware of any set policy but consent is normally given
Nationwide Building Society
Normally fine, rate is loaded by 1.5% after 6 months letting
Santander
Consent incurs a flat fee of £299 except flexible products which have their rate loaded by 1%
Virgin Money
We are not aware of Northern Rock changing its position on consent to let since it became Virgin Money in 2012.
Northern Rock would charge a flat fee of £100 for consent to let, and charge no fee if consent was not provided.
Rent would need to cover 125% of the mortgage payment and consent is provided for a 12 month period.