Mortgage company won't let me let!

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I bought an apartment in November which i intended to live in as my partner & I were splitting up. We have patched things up and so i asked the mortgage company if i could let the property. I was told on two occasions via telephone that this was no problem. When i went to the estate agents, i was asked for a "consent to let" letter from the mortgage company. I contacted them to request this but instead, got an application form. I duly filled this in and returned it. The mortgage company then wrote back saying that as i had only recently completed and the rental amount would not cover the repayment, permission was denied. I would have a shortfall of about £150pm which i can comfortably put to the rental income and so meet my mortgage repayment. So what's the problem? As things stand, i have an empty property and cannot sustain where i am currently living and the apartment. How dangerous would it be to let privately without telling the mortgage company? I really need some advice guys!

jonesMUFCforever

Could you not raise the rent to cover the mortgage?
What kind of mortgage do you have - are you tied in?
If you have to consider going on a different buy to let tariff.

Rick62

In the past most lenders gave 'consent to let' permissions very easily. I suspect that quite a few BTL LL's have abused this, for instance to get a higher loan than they could on a BTL mortgage or to get a better rate of interest. As a result I suspect that lenders are starting to look more closely at consent to lets, particularly on recent mortgages, and you have been a victim of this closer scrutiny.

As a first step I would recommend writing to the lender setting out clearly the circumstances behind this, to demonstrate that your circumstances have genuinly changed and that you are not just a BTL LL who has lied to get a better mortgage, but that your personal circumstances have genuinely changed.

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ejones999

If i put the rent up any more, i don't think it would let even though it's a brand new property
Yes I am tied in - I have 2 fixed rate repayment mortgage

Rick62
Everything i told the mortgage company has been perfectly true as i genuinely did intend to live in the property. I will do as you suggest but should i be declined again, what then?

Thanks for taking the time to reply, i do appreciate it

chant1l

Change mortgage types, or just rent out the property and pay the mortgage. Ok plan 2 is not in accordance with you mortgage company offer, but as a fix it gets you from point a to point b. They wont foreclose on you unless you miss some payments. You can then change to a more suitable mortgage.
Your bank statements will all go to the property though...

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chant1l
I am considering option 2 but am a little worried even though, as i said, I would have no trouble paying up each month.

treets

I'm quite interested in this too.

Similar situation. Slight shortfall (£80/m) but would rather like someone to pay the difference in mortgage (£575/m) on, I hope, an appreciating asset over the long term.

Thought about getting an interest only - would be paid fully then, but I can afford to pay the difference.

Haven't told the mortgage co, but will tell insurance co though.

ps - btw - glad you patched it up - hope it works out for you

Pods

Still not sure on what to do - does anyone else have any advice for me? Thanks to those who replied so far

MarkyMarkD

chant1l wrote:

Your bank statements will all go to the property though...

You can pay Royal Mail to redirect your mail and it's not very expensive.

Guy_Montag

Can you top up the payments if IRs rise another 50bp? what about if they rise 100bp?

What if you don't tell the bank, then can't make the payments?

jonesMUFCforever

The reason why you need permission is to safeguard the lender in the worst case scenario of them having to repossess the flat.
Just imagine them getting a court order to 'evict' you only to find your tenant has 'tenancy' rights and cannot be removed so the sale collapses. Who do you think they will come after for damages??

Be careful is all I am saying.