Consent to Let Out Your Residential Property

Consent to let is when you ask your residential mortgage lender if they will allow you to rent out your property.

Things to consider before asking for Consent To Let

Your lender could refuse. they have discretion as you are asking to change the terms agreed for the original mortgage.

If you are moving for a job or for family reasons, your lender will be more likely to accept this taher than because you want to get rental income.

There is never any guarantee of consent to let. I would strongly advise against deliberately setting out to obtain a residential property using a lower deposit and a cheaper mortgage and then expecting to rent it out. It is a very risky move that could backfire. If you were to repeat this strategy lenders would deem this ‘gaming the system’ and you could end up with a fraud alert or blacklisted.

Your lender may make a charge; this could be a one-off admin fee or an annual ‘consent renewal’ fee or both.

The lender may increase your mortgage interest rate. You would then need to compare the repayments versus refinancing onto a buy to let mortgage.

The lender may only allow you a certain period of time after which they will expect you to move back in or remortgage elsewhere.

Lenders would typically expect you to be resident in the UK and employed. If this is not to be the case then you must specify this with the lender and get express permission based on your plans.

Lenders would typically only allow a single let on a standard Assured Shorthold Tenancy.

Looking to use your property as a holiday let, HMO, short term accommodation, Serviced Accommodation etc then you must tell your lender but this is likely to be refused.

With consent to let granted, your lender is unlikely to allow you to withdraw any equity so if that is needed you may be best to remortgage onto a buy to let mortgage.

If you are on a repayment mortgage the lender is unlikely to allow you to switch to interest-only and you may be better off remortgaging to an interest-only buy to let mortgage.

You will need to arrange a specialist landlord insurance policy; ordinary residential household insurance will not cover you for damages caused by a tenant or if you are not in occupation.

You should check the terms of your lease if your property is leasehold. There may be a charge to do so or it could be a breach of your lease.

Always obtain any such permission in writing and/or record the call and be very specific about your own plans and plans for the property. It is not unusual for lenders/management companies to deny approval later!

If you intend to purchase another property your new lender will probably request evidence of consent to let in order to ignore the mortgage payment from your affordability.

Do not consider NOT getting permission; ignore what your mate down the pub says!

To let out the property without consent is a breach of your mortgage terms and could result in your mortgage being called in eg: a request for repayment.

You could also invalidate any insurance on the property even if you arranged a specialist rental insurance as your lender is a party to your insurance and them not knowing could mean your insurance won’t payout.

I hope this list has been useful in understanding consent to let and the potential problems.

If you would like to discuss your situation in more detail simply get in touch and we can look at your available options as well as next steps.

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