Renting out your home without a Buy-to-Let mortgage – a Landlord’s Guide to Consent To Let
If you’re contemplating becoming a landlord, you may be wondering whether you can let out your property if you don’t have a specific buy-to-let mortgage.
There is a common misconception that landlords must acquire a buy-to-let home loan before renting out their property to tenants but, in fact, it’s possible to let your home out with a standard residential mortgage as long as you have Consent to Let.
The expert lettings team here at Perry Bishop have all the information you need about getting this permission from your mortgage lender.
Consent To Let – An Overview
Your mortgage lender can give you permission to let your property by giving you “consent to let”. If you have a standard residential mortgage instead of a specific buy-to-let mortgage, you must obtain this permission before you rent your home out. Consent may also be required from other authorities including your housing association or any other organisation that has regulations that apply to your home (for example, shared ownership), any other adult with occupancy rights, and your insurance provider.
Why Is Consent Required?
If you have bought your home with a standard residential mortgage, one mortgage condition will be that you live in the home yourself. If you let out your property without first getting permission from your mortgage lender, you will very likely be in breach of contract and you could end up with a financial penalty such as additional payments or extra interest. For this reason, if you have a residential mortgage and want to let out your home you must either obtain consent or change to a specific buy-to-let mortgage.
When Must I Get Consent?
Once you’ve decided to rent your property out to a tenant, you must get in touch with your lender and arrange for permission to be granted. Sometimes, it’s best to switch to a buy-to-let loan, but in some cases, obtaining Consent To Let will be the best option for you. For example, if your mortgage is currently a fixed-term product but you’re keen to leave, obtaining consent and then renting out the property can help you avoid the early repayment fees. If you’re planning to move overseas for a short period but will eventually return, obtaining consent will enable you to let out the property while you’re away, giving you some additional income to pay for the cost of renting another property in your chosen destination.
How Can I Obtain Consent to Let?
You can get consent by getting in touch directly with your lender. Every lender has their own process, however, they can discuss the options available to you. The fees you will be charged will differ depending on which lender you are with. While some charge one-off fees, others charge an increased rate of interest, and others don’t charge a fee at all. If you are granted consent, it will only be for a specified period. Usually, it will be to the end of a fixed-term mortgage, however, some lenders will work on either a 12 month or 6 month basis. After the consent period has ended, you’ll need to get in touch with the lender again to discuss your next steps. Your lender may extend your consent period or ask you to change to a buy-to-let product.
Most lenders will accept your request for consent, but it’s likely there’ll be some restrictions. For example, you may need to earn a certain amount to obtain permission, or you may have to have a specified amount of equity in the property. You may also need to earn an income from rent to cover your mortgage payments. You may also find that you have to have been with your lender for a specific period before being given consent. If you’ve defaulted on your mortgage payments you will find it hard to get consent, and you may also find extra restrictions if you have a Help To Buy or Shared Ownership mortgage.
Ready To Let?
If you’re ready to let out your property our friendly and experienced lettings team at Perry Bishop are happy to help.
Just give us a call today or send an email to lettings@perrybishop.co.uk and we can get to work finding you the perfect tenant.
We care about property. We care about you.