First Direct - consent to let

socrates

HSBC are not as stringent as First Direct even though they are in effect one and the same.

Again LTV and anticipated rental income as well as your salary are all relevant.

I do not normally advocate this but in the case of FD as they are so pedantic I would rent it out and tell them nothing!

Hope I have not opened up a can of worms for myself...

karie

thanks socrates!

have to approach hsbc shortly as am moving into my boyfriend's house and want to rent out my flat as a result.
unfortunately i would say my LTV is pretty rubbish right now. however, the rental income would be at least 1.3 times the monthly mortgage payment (more if i had to switch to interest only), my mortgage is pretty manageable at 2.5 x my annual salary, and i wont be paying rent at my boyfriends house so will have extra disposable income to save/overpay. hopefully hsbc will be okay with this as my mortgage is tracking at 0.89% above BOE and i dont want to lose that rate!!

MissMoneypenny

socrates wrote: »

HSBC are not as stringent as First Direct even though they are in effect one and the same.

Again LTV and anticipated rental income as well as your salary are all relevant.

I do not normally advocate this but in the case of FD as they are so pedantic I would rent it out and tell them nothing!

Hope I have not opened up a can of worms for myself...

You are well aware that without that permission to let from the lender, the tenant could be thrown out of the property with little of no notice instead of the 2 months notice. What if those tenants have children?

They will be able to sue the landlord and probably the letting agent, but that will be of little comfort to them when they are thrown out on the street with their children. Remember the thread where the tenant had 30 minutes to put stickers on their belongings before they were thrown out, through no fault of their own.

socrates

MissMoneypenny wrote: »

You are well aware that without that permission to let from the lender, the tenant could be thrown out of the property with little of no notice instead of the 2 months notice. What if those tenants have children?

They will be able to sue the landlord, but that will be of little comfort to them when they are thrown out on the street with their children. Remember the thread where the tenant had 30 minutes to put stickers on their belongings before they were thrown out, through no fault of their own.

Thats all on the basis that they do not service the loan properly - so a lot of ifs buts and maybes.

Thats why I said I do not condone it.

silvercar

You are well aware that without that permission to let from the lender, the tenant could be thrown out of the property with little of no notice instead of the 2 months notice. What if those tenants have children?

More often judges will grant a tenant 14 or 28 days to remain in the property.

Also remember that the tenant will have received letters addressed to "the occupier" from the lender before repossession, so should be aware that something is wrong.

I agree in an ideal world all landlords should have consent to let, but what do people do when their only opportunity to keep up with their mortgage is to rent the property out? If the tenant pays the rent when due, there is every probability the mortgage will be paid and no one will be repossessed.

MissMoneypenny

silvercar wrote: »

I agree in an ideal world all landlords should have consent to let, but what do people do when their only opportunity to keep up with their mortgage is to rent the property out?

Let it out to some poor trusting sole with children? Or they could try something honest, like getting a second job.

silvercar wrote: »

If the tenant pays the rent when due, there is every probability the mortgage will be paid and no one will be repossessed.

Silvercar, "every probability" is not good enough. You know we have threads on this board where tenants have paid their rent and the landlord still hasn't paid the mortgage. Would you like it if you and your daughter were renting, paid your rent and then found out you weren't going to get 2 months notice to find another property because the landlord hadn't paid the mortgage and was being repossessed?

I'm sure everybody has the intention of paying the mortgage, but things happen. If a landlord hasn't got permission to let from their mortgage lender then the poor tenant and their family could be thrown out with little or no notice through no fault of their own.

If a landlord is prepared to lie on a big thing like letting a property they don't have permission to let, then what else are they prepared to lie about?

Tenants should always check that the landlord has received permission to let from their lender

socrates

MissMoneypenny wrote: »

Silvercar, "every probability" is not good enough. You know we have threads on this board where tenants have paid their rent and the landlord still hasn't paid the mortgage. Would you like it if you and your daughter were renting, paid your rent and then found out you weren't going to get 2 months notice to find another property because the landlord hadn't paid the mortgage and was being repossessed?

I'm sure everybody has the intention of paying the mortgage, but things happen. If a landlord hasn't got permission to let from their mortgage lender then the poor tenant and their family could be thrown out with little or no notice through no fault of their own.

If a landlord is prepared to lie on a big thing like letting a property they don't have permission to let, then what else are they prepared to lie about?

Tenants should always check that the landlord has received permission to let from their lender

How about the tenants who play "cat and mouse" with LL's, do not pay rate up to the maximum point they cannot, damage a property etc. etc.

That happens a lot more than the scenario you paint.

The rentals/housing market has changed more in the last 6 months than probably the last 20 years.

Banks have not moved with the times quickly enough and hide behind small print - when it suits them.

We will never agree on this subject.

But I would put any money that there are a lot more tenants who have run away owing money and have caused malicious damage than there are LL's who have had properties repossessed and their tenants thrown into the streets with their children and their toys (going with your extreme scenario's theme)

atmclg

Thank you for posting about First Direct and consent to let. We have an offset mortgage with them and would like to rent out our house while we move to a larger (rental) property to accommodate our impending second child.

I asked FD about it a few months ago and was given a flat "no." I tried again today, this time making sure that I was speaking to a mortgage advisor, who put me through to their credit department. I explained the reason, and that it was just for six months (after that we'll be in a better position to decide whether to sell or continue renting the house we own). They said that because it was for a short term, they would be happy to give consent to let. Result!

Turnbull2000

I wouldn't worry about it too much. Loads of accidental landlords don't have consent from lenders.

But can I ask, are you going to inform any potential tenant that the let is for 1 year only, or are you going to surprise them with a lovely eviction notice just as they're settling into a home? I bet it's the latter.

Vmd_2

Amusingly, today I tried to apply for a mortgage with First Direct. Unfortunately they said they could to offer me any mortgage because I rented out a room in my house to a tenant. Surprised by this I did a quick google for 'first direct rent a room' and found this very recent press release:

wwwnewsroomfirstdirectcom/press/release/renting_out_a_room_could_shave

...in which First Direct talk about how much you could save off your offset mortgage by renting out a room. I contacted the First Direct PR people mentioned in the release and will report back what I learn.

I'll need to remortgage quite soon, so not clear if they'll resolve their confusion in time for me, but we'll see.