Finding 'Consumer buy to let'

hotnuts21

Im looking to remortgage a house ive recently moved out of but still own, im living with my partner in a house we have purchased together. Im whats called an accidental landlord!

Im currently renovating the empty house, and have a tenant ready to move in from July, my fixed rate mortgage is up in Septemeber so im looking to remortgage to a Buy to let.

But i was told today, im not allowed a BTL, instead I have to get a consumer BTL as im an accidental landlord.

However I cant seem to find ANYONE whos doing these, googling it just brings up lots of people talking about it and no rates or mortgages. I cant even find anything on MSE or the forums.

Any ideas where and what rates these mortgages are likely to be?

dunstonh

But i was told today, im not allowed a BTL, instead I have to get a consumer BTL as im an accidental landlord.

No big deal there. It is classification from your point of view. Have a word with your local mortgage broker.

AnotherJoe

I think you mean a " consent to let"from your mortgage co for the current mortgage to rent it out from July.
Come September you'll then need to get a standard BTL mortgage.

If you remortgage as a BTL with someone else now, you'll need to pay an early repayment charge on the current mortgage. It might be your current lender will let you get a BTL with them now without the ERC.ask them about Consent To Let and BTL.

kingstreet

All you need to know is it's a "let to buy," as CBTL is a technical term for lenders and brokers so they know it has a greater degree of consumer protection attached to it than a standard BTL because it is not a purely investment-based transaction.

You would best be served by appointing an independent broker to advise you on this and on timing - as AJ says, if you attempt to complete before your current fix ends, you will probably have penalties to pay.

happylucky

No, I'm assuming op means exactly as stated, based on relatively recent changes to BTL mortgage market which basically classify borrowers for BTL as either professional landlords or non-professional (aka consumer). The latter = op. This means they are liable to affordability criteria similar to straight consumer mortgages.

These changes only came into force second half of March, I think.

It will be yet another nail in the landlord coffin.

OP, I am generally very pro using a good mortgage broker anyway, but sounds like a particularly wise idea for you.

happylucky

X posted with kingstreet....but yes, you will theoretically need CTL from your existing lender July to Sept too, I think. Again, a good broker can advise you best if it's worth bothering with for that period of time.

jamesd

You may find it cheaper to increase borrowing on the place you're living instead of using borrowing secured on the property being let. The security for the loan doesn't matter, just the business purpose of the BTL use, so you can still deduct the interest as an expense, to the extent changes in law will permit it in the future.

tlc678910

You could consider asking your current lender for consent to let before worrying about a buy to let mortgage? If your current mortgage is at a decent rate it could be a lot cheaper than a buy to let mortgage and you could continue to pay a repayment mortgage when with a buy to let rate perhaps you could only afford interest only?

We also consider ourselves "accidental landlords" as we had to move across the country for work and our house was in negative equity so permission to let saved our bacon.

We were granted permission to let our property for 3 years for a small admin fee (I think £30) and a bit extra on the mortgage rate (I think 1% but I'm not certain about that). We can ask to extend after the three years (they could say no).


My relative was granted permission to let (indefinitely) for a fee of 1% of their mortgage. As they had a brilliant mortgage rate and they were allowed to keep it they couldn't believe their luck.

Worth a try.
Tlc

edit: I'm assuming you have already bought the second house and don't need to alter your borrowing amount which you wouldn't be able to do.

hotnuts21

Thanks for all the replies to clarify a few questions.

Yes I have already bought the second 'family' house, we completed in November and we have been living in it since then. My old 'small' house is currently being renovated by myself (slowly).

The mortgage on the Small house is with First Direct and they have given me consent to let until January, but as they dont do BTL mortgages, I need to find another one, anytime between Sept and Jan. Ive started looking now as some offers last for 6 months, and I want to see what rates are available.

My small house mortgage rate is about 4.5%.

Yeah the problem is the rules changed in March, my local broker just told me I could get a BTL, but when speaking to some BTL providers they said they didnt do the consumer one, and hence here I am!

Edit
Im just looking to remortgage and I have about 20% equity in the house.

dunstonh

Yeah the problem is the rules changed in March, my local broker just told me I could get a BTL, but when speaking to some BTL providers they said they didnt do the consumer one, and hence here I am!

Do you mean the broker spoke to some or you spoke to some?

Can't see why a broker would have any issues unless they didnt go for full permissions and are restricted in what they can do (such as limited panel).

Bravestar

hotnuts21 wrote: »

Im looking to remortgage a house ive recently moved out of but still own, im living with my partner in a house we have purchased together. Im whats called an accidental landlord!

Im currently renovating the empty house, and have a tenant ready to move in from July, my fixed rate mortgage is up in Septemeber so im looking to remortgage to a Buy to let.

But i was told today, im not allowed a BTL, instead I have to get a consumer BTL as im an accidental landlord.

However I cant seem to find ANYONE whos doing these, googling it just brings up lots of people talking about it and no rates or mortgages. I cant even find anything on MSE or the forums.

Any ideas where and what rates these mortgages are likely to be?

If you are no longer living in the property, you are almost certianly in breach of your existing mortgage agreement.

Not sure exactly what you mean by "currently renovating the empty house". If yo simply mean splashing a bit of paint around and maybe papering the odd wall in an attempt to make it more appealing to a tenant, then that itself won't be an issue. But if it is major renovation (as it appears to be planned to take 2 months) then that is also something you should have advised your lender about.

You may also not have effective buildings insurance in place due to both the above reasons (unless you have informed them and they have accepted it) - that too would be a breach of your current mortgage agreement.

Having said all that, assuming no major renovation is taking place, or if it is, once it is completed, then there should be no issues with obtaining a BTL mortgage which is what you should have if you wish to now let the property on an ongoing basis.
(You'll need appropriate buildings insurance too)

How you have become a (prosepective) landlord is irrelevant, but if it is by accident, are you sure this is a business you wish to be in?

Edit: I see some mention that the rules/regulations have changed within the last 6 weeks?
If so, that advice is probably more up to date than anything I have posted.

Edit2: I probably should have read the thread entirely before posting. I see later you alreday applied for and were granted CTL. In which case I would wait until it's renovated and let, then I can't really see the issue with getting a traditional BTL remortgage against the property.
(I don't know the new rules being talked about here, but surely there comes a point where an 'accidental landlord' becomes an 'on-purpose landlord')