Consent to let [flexible mortgage]

florida24ms

Hello guys,

I’d appreciate your advice if any of you have had experience requesting Consent to Let (CtL) from Santander or indeed you know how such approval is given.

I have a competitive (by today’s standards) term tracker mortgage on a residential property: 0.49% above BoE, over 25 years, 90% LTV when taken out in 2008 as FTB, 72% LTV remaining now (we’ve overpaid every month; total overpayments is almost the same as all capital repaid since 2008), mortgage is portable, a flexible offset mortgage.

I’m not a landlord, but have considered keeping the flat, renting it out (it’s in a prime location), and then getting another mortgage to buy a house. Under what terms will Santander give CtL? I appreciate it’s a case by case approval, but it would help knowing what Santander will ask for before even contemplating whether to go down this route or not. Will they ask for an approval fee (CtL application fee I see is currently £295) or will they say: “sorry, your mortgage is too competitive; it’s a flexible mortgage, so you’ll have to pay 1.99% above BoE to receive CtL”.

Or perhaps Santander will not even give us CtL? I understand that in Santander’s lending criteria it says that flexible offset mortgages are not available for buy to let. Given that Santander no longer offer BTL mortgages, what does this mean? Will they not grant CtL to customers on a flexible offset mortgage?

Thank you very much.

Thrugelmir

CTL is normally granted where people are locating abroad for work or elsewhere in the country for a temporary period. In other words where the borrower will return to live in the property at a later date.

Brisbanebronco

Hi

Im in exactly the same position (only Im paying 0.99% on base rate!) - essentially you need to apply for consent to let as you say and they may ask for a letter from your estate agent indicating the likliehood of renting and the suggested rent you would achieve. They'll charge you £95 for switching to this and will review it every year. They've already lent you the money so its really just a case of them assessing the viability of switching this to a B2L, they just dont offer B2L mortgages to new loans. If you want to switch to interest only though thats a different matter

Old_No.7

Hi, we were with A&L, now Santander, and have consent to let from them for our flat. It's been going for about 6 years now, and we've not moved abroad or far away: we just wanted to keep the flat (I was a bit scared of not liking our new town) and let it out, and we were given consent to let for it on that basis. We don't use an agent, so we were sent a paragraph to include in the contracts for the tenants (to indicate it's on a consent to let that can be withdrawn), and yes, they only give it for a year (it used to be 3 years for £125. Now £95 per year, IIRC). We were on a discounted one, have since remortgaged to another discounted product with them and made it interest-only, without any problem.
I had to sent them a copy of the inital contracts (we rent out by the room, so have 3 tenants in the flat). I can't remember if there was a specific amount of rent compared to the mortgage outgoings that we had to meet, but we were given it without much hassle. Hopefully they haven't changed too much.
Good luck with it!

florida24ms

Thank you all for your responses.

We would not be relocating abroad or moving elsewhere in the country temporarily - only to return to live at the property at a later stage. The idea is to buy a second bigger property and keep the flat as a “family investment”. Our kids would perhaps return to live at the flat and make it their own main residence in 20 years or so; so, the aim is not speculative. I’m not interested in switching the mortgage on the property to interest only; borrowing has to be repaid that’s why I think a repayment mortgage is always better.

My expectation was (perhaps wrongly) that consent to let is given indefinitely. I won’t go back to the lender for another mortgage product; I’m happy with the term tracker, so I thought on the same basis consent to let would be “open ended”. Even if it is on a yearly basis and it gets reviewed, no problem. But I would rather not have the lender put me in the position where after so many years they withdraw the consent to let; my main residence would then be the second property and I’d have to sell the flat; I’d rather sell on my own terms not when they withdraw the consent.

Thrugelmir

Nationwide now add a 1.5% charge after the first 6 months.

So unwise to assume that Santander will maintain their policy indefinately.

florida24ms

Thrugelmir wrote: »

Nationwide now add a 1.5% charge after the first 6 months.

Fair enough. I'd be happy with 1.5% added to the tracker differential to take it up to 1.99% above BoE. I won't know that Santander will take that view though until I apply... not quite there yet.

Thanks again.

pinklady21

Hi there
Did you ever get anywhere with Santander and CTL?
I am also about to ask them for CtL and would like to know what my chances are!!
Thanks!

huwy123

I also in the same boat and would love to know how you got on with this?

kingstreet

I suspect the days of CTL under Santander at your current rate may be numbered. They re-entered the BTL market yesterday and I'd expect a spin-off to be an attempt to increase the profitability of the CTL book by forcing borrowers onto less attractive rates a la Halifax.

http://www.mortgagestrategy.co.uk/1043089.article?cmpid=MSE01&cmptype=newsletter&email=true

huwy123

Thanks for letting me know that. Do you think it would be better to apply sooner rather than later?