Halifax consent lease - Huge hike and arrangement fee! Advice needed

Billington

I posted this on the rentals board but someone suggested I post it here as well.

Ok I'm really shocked by Halifax. Basically my wife and I own our 2 bedroom house in Brighton and want to rent it out and rent a flat in London as we need to move for work. We currently have a 2 year £200,000 tracker mortgage running for another 20 months at around 1.6% above the base rate meaning we are paying around £350 month in interest and another £450 into the capital. We took this offer in Jan of this year with a £900 fee added on the mortgage.

Last week we called them to check about getting their consent to let it and they asked us to come into the branch. They then informed us that if we let the property we would have to go on their most expensive 'consent to lease 'mortgage as our LTV is 79% which is fixed for 3 years at 5.4% and has an arrangement fee of around £1,250. This would mean our interest only payment would be just over £900/month in interest without even paying into the capital and we would be paying another huge fee on top of the one we just paid for the tracker deal in Jan. We reckon we could get £1200 in rental, but Halifax's consent to lease offer mortgage seems way excessive compared to what we are paying now. She said we had no other option other than get a buy to let mortgage with another company which would mean we'd pay redemption fees of £6000!

Do we have any other option than take up their new mortgage? Seems extortionate to me.

_Andy_

See also

http://forums.moneysavingexpert.com/showthread.html?t=1819529

happybroker

"If you want to lease / rent out your home to somebody else, you'll need to see one of our Mortgage Reviewers to discuss this as it is subject to our agreement. Our reviewer will advise you if we agree to the proposed letting and what our requirements are."

This is from the Halifax website which indeed suggests you would need to go into a branch and speak to a "reviewer" whatever one of those is....I guess some one who's job it is is to "sell" mortgages rather than advise on them.

I have clients who have obtained the consent of Halifax to the letting of their property for which they pay a fee each year (not much, a couple of hundred quid or something) but I have heard increasing reports of what you describe. I am of the opinion that the "reviewer" you saw in the branch is not hitting target, doesn't get any credit for gaining consent to a let on the existing mortgage and so is pushing a btl mortgage on you.

Write a letter to the mortgage processing centre (or ring them) and go through it on the telephone, tell them you can't get into your branch and that you need to do this over the telephone or by post.

They don't have to consent to the letting and whilst you will get a load of posts on here saying let it without consent this could cause you major problems....you would be in breach of your mortgage conditions which could render your tenancy agreement unenforcable.

Billington

So unbelievably I just get a call on my mobile from the woman we saw yesterday saying that a new directive has come down from head office this morning saying that customers on existing mortgages with early penalty clauses can stay on their deals and obtain a consent to lease. Can't quite believe it!