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Consent to Let not granted - what are the options?
PaulAA_2
Posts: 56 Forumite
Hi all,
The lender has declined a Consent to Let application on the grounds that the current product is less than 6 months old. The property in question has been mortgaged with the same lender for over a year now.
I'm in positive equity and can afford necessary repairs, agents' fees etc. I'm looking to move to a different area, but not sure if I like it there, so will not be buying there just yet. I think the said property will be seeing little use in the meanwhile.
What risks would I be taking if I go ahead with one of the following options:
(a) subletting a room on a longer-term basis;
(b) subletting a room using airbnb;
(c) letting the whole property via an agency?
How would the absence of bank's consent to let affect the LL insurance and the contract with airbnb or letting agency?
PS How taxing is managing a property on airbnb?
The lender has declined a Consent to Let application on the grounds that the current product is less than 6 months old. The property in question has been mortgaged with the same lender for over a year now.
I'm in positive equity and can afford necessary repairs, agents' fees etc. I'm looking to move to a different area, but not sure if I like it there, so will not be buying there just yet. I think the said property will be seeing little use in the meanwhile.
What risks would I be taking if I go ahead with one of the following options:
(a) subletting a room on a longer-term basis;
(b) subletting a room using airbnb;
(c) letting the whole property via an agency?
How would the absence of bank's consent to let affect the LL insurance and the contract with airbnb or letting agency?
PS How taxing is managing a property on airbnb?
0
Comments
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Hi all,
The lender has declined a Consent to Let application on the grounds that the current product is less than 6 months old. The property in question has been mortgaged with the same lender for over a year now.
I'm in positive equity and can afford necessary repairs, agents' fees etc. I'm looking to move to a different area, but not sure if I like it there, so will not be buying there just yet. I think the said property will be seeing little use in the meanwhile.
What risks would I be taking if I go ahead with one of the following options:
(a) subletting a room on a longer-term basis; This is not subletting. You will be renting out a room to a tenant. (which you arent allowed to do)
(b) subletting a room using airbnb; This is not subletting. You will be renting out the room to a person, under a liense to occupy (e.g. holiday let) however i suspect the mortgage company include such an arrangement.
(c) letting the whole property via an agency? You arent allowed to do this
How would the absence of bank's consent to let affect the LL insurance and the contract with airbnb or letting agency?
PS How taxing is managing a property on airbnb?
The lack of consent can in extreme circumstances mean the lender recalls the mortgage and forces a sale of the property.
Prior to this it is likely they would raise the rate of your morgtage.
The obvious effect on any contract you have is the property could be sold and the contract therefore becomes frustrated.
You could ofcourse leave it empty - which is your only option.0 -
Why not just stay where you are until CTL can be granted?0
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Just to point out, when I merely enquired about CTL with my lender, they put a fraud marker on my account. This apparently flagged up that I enquired but did not make the application so they think I may be letting without consent. I wasn't.
I would expect they would put such a flag on your account now that they have refused CTL and will keep a closer eye on your account than they otherwise would have.0 -
If you don't live there yourself, ALL of the arrangements you suggest above would give the occupier 'exclusive occupation'. They would be a tenant. You would be in breach of your mortgage.
You best option is to switch to a BTL mortgage.0 -
If you don't live there yourself, ALL of the arrangements you suggest above would give the occupier 'exclusive occupation'. They would be a tenant. You would be in breach of your mortgage.
You best option is to switch to a BTL mortgage.
I 'think' AirBnB can sometimes be a holiday let. But that would attract business rates etc. So whilst not tenants, still not covered by a residential mortgage.0 -
I 'think' AirBnB can sometimes be a holiday let. But that would attract business rates etc. So whilst not tenants, still not covered by a residential mortgage.
Happy to pay the tax. How can I check whether the airbnb option would be in a breach of the existing mortgage?
Current LTV is a tad too high for switching to BTL, which requires at most 75% LTV.0 -
Happy to pay the tax. How can I check whether the airbnb option would be in a breach of the existing mortgage?
Current LTV is a tad too high for switching to BTL, which requires at most 75% LTV.
It's not that simple. You still wouldnt be covered by the mortgage. The lender could still force a sale through.
To them it looks like you got a mortgage for business use, but you purchased a personal product0 -
A mortgage is merely a loan secured on a asset, as long a repayments are met, its highly unlikely any issues will arise, make sure you have LL insurance though.ANURADHA KOIRALA ??? go on throw it in google.0
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