Santander consent to let - AirBnB

bc10_2

Hi Silver

I've seen many instances where it is stated online but here's one reference:

"It might be tempting to let a property without telling the lender, but it is a high-risk move. It would breach the terms and conditions of the contract and in the worst case lenders could demand full and final repayment, which would force many borrowers to default on the loan.

Andrew Montlake of mortgage broker Coreco said letting a property without permission also invalidates home insurance policies, which could prove disastrous if something happened to the property while it was being let."

Source: Telegraph (unable to post link)

G_M

bc10 wrote: »

Hi Silver

I've seen many instances where it is stated online but here's one reference:

"It might be tempting to let a property without telling the lender, but it is a high-risk move. It would breach the terms and conditions of the contract and in the worst case lenders could demand full and final repayment, which would force many borrowers to default on the loan.

Andrew Montlake of mortgage broker Coreco said letting a property without permission also invalidates home insurance policies, which could prove disastrous if something happened to the property while it was being let."

Source: Telegraph (unable to post link)

"let a property". Again you are confusing a tenancy with a licence.

However I would certainly check with your insurer, and your lender to be safe.

And ensure income is declared ( HMRC). Also comply with safety regs etc.

LODGERS (Licencees/Excluded Occupiers)
A lodger (broadly) lives in the same property with their resident landlord, and shares facilities. Unlike tenants, lodgers have few rights.

The Housing Act 1988 provides definitions of 'Resident Landlord' and 'same property' (S31 & Schedule 1 (10).

There is advice for landlords considering taking in lodgers here:

LodgerLandlord (21 tips from solicitor Tessa Shepperson + General information site)

Landlordzone (Various articles on taking in lodgers)

Renting out rooms in your home (Government info)

Rent a Room Scheme (Government scheme for tax-free income from lodgers)

If you are providing 'services', (cleaning, bed linen, food) I would google 'setting up a B&B' for more advice.......

eg

http://www.moneymagpie.com/article/running-a-bb-3

bc10_2

G_M - thank you so much. your post was invaluable inc the links it contained.
Based on it & what others have advised I believe I should be OK taking in lodgers. If I go over 2, we'll be classified as a HMO which is fine as the property already meets requirements.

I will consult a property lawyer tomorrow & get in touch with Santander as well as my home insurance to get the necessary permissions in writing & update everyone on the board. The final check I'll also perform is with the local authority to understand HMO & Change of Use considerations. this seems remarkably straight forward :j

gazter

bc10 wrote: »

Hi Gazter

The problem with not telling the bank is that a) if a guest were to ever burn the building down, my insurance would be invalid if I was in breach of my mortgage terms OR had only a residential insurance. if the bank later did find out they could repossess the house & totally block my ability to refinance elsewhere. Legally, the only real option is to do things through the books.. The terms are just frustratingly ambiguous & unfair (the bank wouldn't care if I threw house parties & potentially impair the value of the house, but the moment one wants to be a bit entrepreneurial the restrictions kick in..)

I did mention about insurances, you need to get them right. But my insurance has nothing to do with my lender. Just go through a broker. It depends how much of a business is business.

If the mortgage terms are ambiguous then that really is not your problem. If it says dont do X, and you do X, you can be in trouble. If it says dont do X, but you are doing Y, then thats their problem.

If it says the mortgage is for the primary purpose of X, with a bit of Y. Then that is their problem. At the very worst they might ask you to stop.

You think a bank is going to pull in a mortgage on that basis?