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i know some landlords who do.... i dont agree with it.. but i can sometimes see how greedy lenders put folks into an impossible situation where they cannot live there but cannot pay the mortgage unless they do rent out... catch 22.....0
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Clutton - why have you got into this habit of (a) describing other posters as "hysterical" if they post an alternative view to your own and (b) assuming that you know who or what (T/OO/LL) the other posters are?Tenants on this forum get quite hysterical about "consent to let" and the truth is that there is no link between insurers and lenders....
paulhutch - it's highly likely that as part of the pressure on government to address this issue, closer attention will be paid by both lenders and insurers.
You may be 100% trusting of your friends/potential tenants at the moment but 2-3 years is a fair amount of time. If there is any dispute that arises between you, they may choose to notify your lender. Better that the lender hears it from you and that appropriate arrangements are in place from the start.
What Clutton is saying about her personal experience may have absolutely no relevance to you, in the same way that someone who speeds but has yet to be caught doing so can tell you that its fine for you to speed too. She is also ignoring the possibility that the very fact that she is not asked the question may well be because her insurers already know that she has either a BTL or CTL in place. The information is readily available to insurers and, as the others have pointed out, you may find just when you need your insurance company to be paying out they will not do so. There is usually something n the small print along the lines of "is there anything else/any other material fact that you think we (the ins co) should be aware of?"
Clutton repeatedly posts on here about Ts who don't tell the truth in their tenancy application forms and yet conversely seems to think that its okay for LLs to lie/omit to tell their mortgagor what they are up to. Double standards?
Edit: ah, I see that Clutton has since edited her post to say that she "does not agree with it" , whereas before it simply said "i know some LLs who do" .....
For anyone who'd like to know more see the "sticky" up at the top of the Board about consent to let.0 -
We intend to set out a tennancy agreement, get gas safety certs and get land lords insurance.
Make sure you get it in writing from your insurer's underwriters, that they will still pay out (and pay out for a full payment) even though you do not have permission to let out your property from your mortgage lenders. Insurers are quite happy to take your premiums, but it is another matter when they have to pay out and that is when they do their checks. It is up to you to give your insurers the full facts. Hide facts at your own peril.We are also extremely confident of NOT failing the mortgage payments.
Every person who gets a mortgage is confident of not missing a mortgage payments. Sadly, the figures show that many do. Can you afford to pay the mortgage if you have voids? Or if your tenant doesn't pay and you have to let them run into arrears for 2 months before taking them to apply to the courts? Have you got the money to have voids and repair the property, if the tenant smashes the property up and does a runner? Can you pay your repairs such as a new boiler or roof repairs? A missed mortgage payment will impede on your credit rating for the next 6 years. Gone are the days when lenders will overlook poor credit ratings.Do we really need to get consent to let from the lender?
Yes. You signed a mortgage agreement for a residential mortgage and you are required to tell them of any changes.How could the lender find out?
Lots of ways. Anybody can look on Land Registry for just £4 and see that your lender has you down as living at that property and not at another address. That same document also gives the name of your mortgage lender so it is easy to know who to inform about your letting without consent.
Your mail from the lender will go to that address. You can get a redirect, but that service has a limited time span and letters can still slip through and get delivered to that address. Even if the redirect works, the tenant can address an envelope to you at their address and see if that envelope drops of their doorstep or yours.
Internet. This isn't the only site that warns people to check that their landlord/prospective landlord has consent from their mortgage lender to rent the property.
Credit reference agencies. The government are already paying Experian for every benefit cheat they find and I'm sure it won't take mortgage lenders long to realise they can use this service to find their cheats too. It's easy to run a simple query on a database such as the credit agencies have and find out who else comes up with the same address as the mortgage borrower.What would be the reprocusions for landlord and tennent?
For You.
Mortgage lenders exchange information with each other and you will end up with a black mark against your name for future lending. The mortgage lender can then either demand that the mortgage be repaid or make you pay a higher rate of interest for renting out without their consent. Don't expect them to be lenient if you can't afford that new high rate: it is better for the lender to get rid of bad mortgage borrowers sooner, rather than later even if they make a loss on that borrower through repossession.. Mortgage companies sell their mortgages to other companies with a rating and they get a much better price for AAA (good borrowers) rates. Borrowers having little equity in the property, are not good for mortgage lenders in these uncertain times.
The tenant can sue you. There is a time limit on this (6 years?), so if you don't have any money now, they can sue you when you do. If they don't know how to do this, they can come to sites like this one and get advice on how simple this is to do. Many won’t even realise that they have the means to do this through their content insurance. The insurers pay the legal team to sue you and then claim their legal fees from you. You may get away with this if the tenant decides it is easier to get money from the letting agent and sue them instead.
If you need benefits, your rental house will prevent you from getting many benefits.
For the Tenant
If you fail to pay your mortgage, the tenant and their family will get thrown out with little or no notice. The lender will not recognise the contract you gave the tenant as you did not get their Consent to Let. There is a new law coming in that will give tenants 2 months to find somewhere else, but the lender still will not recognise the fixed term: so someone who has a 6 month contract with you, will be thrown out. They can sue you, but that will not ease the distress you have caused them and their family at the time.Advice please, many thanks.
Financial: That will depend on how much financial risk are you prepared to take.
Morally: We all know that there are certain types of people who will let out their house without consent from the lender without any thought for their tenants and their family: so it all boils down to, are you a decent person or not?RENTING? Have you checked to see that your landlord has permission from their mortgage lender to rent the property? If not, you could be thrown out with very little notice.
Read the sticky on the House Buying, Renting & Selling board.0 -
i know some landlords who do.... i dont agree with it.. but i can sometimes see how greedy lenders put folks into an impossible situation where they cannot live there..
That has nothing to do with greedy lenders and everything to do with the borrowers having financial problems. Some people will recognise they have made mistakes and learn from them: while others will always look for someone else to blamebut cannot pay the mortgage unless they do rent out... catch 22.....
Unfortunately they are some types of people who will happily pass their fianancial problems onto unsuspecting families. One can only hope that karma rules.RENTING? Have you checked to see that your landlord has permission from their mortgage lender to rent the property? If not, you could be thrown out with very little notice.
Read the sticky on the House Buying, Renting & Selling board.0 -
Be aware.
Identification of undisclosed Buy-to-Let risk
http://www.experian.co.uk/consumer-information/mover-alerts-information.htmlWhen a customer lets out their home without advising their mortgage lender, it means the debt is incorrectly priced and risk is increased. Getting early notification of properties to rent with Mover Alerts allows the lender to be proactive in protecting its position.0 -
A lot of scaremongering on here.
I'll just pick one bit of codswallop:MissMoneypenny wrote:The tenant can sue you. There is a time limit on this (6 years?), so if you don't have any money now, they can sue you when you do.
The tenant can only sue you if they have incurred a loss ie they cannot sue you for not obtaining consent to let. They can only sue you if they have been evicted as a result of you not obtaining consent to let. Big difference.I'm a Forum Ambassador on The Coronavirus Boards as well as the housing, mortgages and student money saving boards. I volunteer to help get your forum questions answered and keep the forum running smoothly. Forum Ambassadors are not moderators and don't read every post. If you spot an illegal or inappropriate post then please report it to forumteam@moneysavingexpert.com (it's not part of my role to deal with this). Any views are mine and not the official line of MoneySavingExpert.com.0 -
A lot of scaremongering on here.
Hello Silvercar. You do/did a lot of trying to courage people to let out without their lenders permission. Is your theory that the more who don't get Consent to Let, the less risk there is of getting caught? I would have thought that the reverse is true. Lenders are already aware that this is a big risk to them and have reflected this in their terms and conditions. Take a look at the Nationwide thread on this site about the new terms and conditions they have brought out for existing borrowers. One of those terms is that they can impose a higher rate of interest to those borrows who let their property without Consent to Let.'ll just pick one bit of codswallop:
So what are the other things that you assume are "codswallop".The tenant can only sue you if they have incurred a loss ie they cannot sue you for not obtaining consent to let. They can only sue you if they have been evicted as a result of you not obtaining consent to let. Big difference.
I thought that I had made that clear in my (albeit long) post, but I apologies if I didn't. However, you are wrong if you think you can only be sued for causing someone a loss: I have been awarded money by a judge, for "distress", in addition to other monies awarded.
As others have mentioned on threads like these, we also have the law of quiet enjoyment that a landlord is required to give when they sign a contract. If the lender doesn't recoginise the contract as they didn't give their Consent to Let, how can the landlord keep to that law if the tenant is thrown out by the lender?
Paul asked what the reprocusions would be for landlord and tenant and I told him what these were, so he could make an informed decision for himself.
Just to add, I don't make money from letting out houses without consent (as a landlord or letting agent). When I was a landlady, I had consent from my lender. I use to be a FX trader in the city and even I wouldn't risk letting out a property without consent from the lender.RENTING? Have you checked to see that your landlord has permission from their mortgage lender to rent the property? If not, you could be thrown out with very little notice.
Read the sticky on the House Buying, Renting & Selling board.0 -
The scaremongering is that no-one has ever posted on here about being evicted when the landlord does keep up with repayments on a mortgage. Lenders repossess when mortgage holders fall into arrears, they don't repossess when people keep up with their repayments.
Less than 1% of homes are repossessed. Only a small percentage of homes are rented out on owner occupier mortgages, so only a very, very few people would face eviction as tenants. Even then I would reckon that the main reason that a tenant would be evicted for a landlord not having consent to let would be if the tenant wasn't paying the rent. You are looking for a very small number of cases where CTL would make a difference:
1. The owner would be facing repossession.
2. the owner didn't have consent to let
3. the tenancy agreement was in the fixed term of the AST not periodic.
4. they met a particularly harsh judge, who refused to give time to move out.
The important thing is to only let a property if you can afford its upkeep and maintenance.
You make out that CTL is a wonder clause, in practice it can expire mid-tenancy. With CTL all a tenant would get is a lender taking over the tenancy, not ideal. The only difference is that the tenant would get notice to leave at the end of the fixed term rather than mid term/ On a periodic tenancy it would make no difference. Without CTL the lender would write to the property address, so the tenant should find out a landlord's difficulty sooner.
Landlord's insurance is crucial, it protects the landlord from damage caused when the property is tenanted. CTL is nothing to do with getting the correct insurance.
My opinion is that a BTL mortgage (or money secured elsewhere) is a far, far better way as there is no time bar on the consent, you know the landlord's intention is to let the property long term and the terms of the mortgage prevent the landlord moving into the property - preventing the cases we get on here where tenant's post that the landlord wants the property back to live in.I'm a Forum Ambassador on The Coronavirus Boards as well as the housing, mortgages and student money saving boards. I volunteer to help get your forum questions answered and keep the forum running smoothly. Forum Ambassadors are not moderators and don't read every post. If you spot an illegal or inappropriate post then please report it to forumteam@moneysavingexpert.com (it's not part of my role to deal with this). Any views are mine and not the official line of MoneySavingExpert.com.0 -
silvercar you are bashing your head against a brick wall on this one... as am i .... a few folks on here are utterly determined that their way of looking at CTL is the only way... and are unwilling to even enter basic discussion on it.... much of these scaremongering tactics are speculative... as you say there is NO case law where a Lender has repossessed due to lack of CTL..... all that would happen is that the borrower would be moved to a higher interest rate.... which is why some LLs prefer to take the risk....
it is Everything to do with greedy lenders.... a very short while ago the Halifax, as but one example, were charging people up to £5k to switch from a residential to a BTL product... and for some folks who - eg. had been relocated for their job - they simply did not have that sort of money.... which is why some "accidental" landlords did not get CTL - Halifax has revised its charges downwards subsequently......0 -
A lot of scaremongering on here.
I'll just pick one bit of codswallop:
The tenant can only sue you if they have incurred a loss ie they cannot sue you for not obtaining consent to let. They can only sue you if they have been evicted as a result of you not obtaining consent to let. Big difference.
Scaremongering= general term used to mean "someone has posted a comment with which I don't agree"
Silvercar, I think I agree with MissMP's assertion that you seem to encourage letting without CTL, whilst (like Clutton) expecting your Ts to truthfully complete forms for a myriad of checks to be undertaken on them.
I'd like to link to some other views from elsewhere, not least because two of the writers declare themselves to be solicitors. Some of the posts you will probably recognise, Silvercar , since it appears you also contributed to the thread.
Indeed, I was particularly interested to read the advice in this post on LLzone that :
Of course, by the time you come to claim on that insurance policy and discover that there is no cover for, say an injury to your T or his guests, you may well be ruing the day that you thought it okay to lie. When you come to take out any future insurance policy you do, of course, have to declare any fraudulent activity relating to other insurances you may have previously held.It is important to get the correct insurance, pick a company that provides insurance to owner occupiers rather than building.insurance.for.let.properties and the lender would be none the wiser.
Also in that thread were the following posts:
from Jeffrey here, here, here and this one from another Senior Member here
Another article from a solicitor, and here's one from Feb this year in the Financial Times.
Tenants - continue to safeguard yourselves by checking that your LL has either a CTL or a BTL if the property is mortgaged.
The law due to be implemented late this autumn will mean that where your tenancy is recognised by your LLs mortgagor ( ie where there is CTL or BTL financing in place ) you will be entitled to a minimum of 2 months' notice should the LL default on his/her mortgage payments.0
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