Consent to let ending, but keep renting?

fodderstompf

Hi,

Any help greatly appreciated. My consent to let is ending soon, but I’ve been told I can not get a suitable buy-to-let mortgage from my lender because I’m not based in the Uk and my earnings are not high enough.

What’s your opinion on me continuing to rent out the property without letting the lender know? How would they ever know? I’m just asking the question here, is it a complete no no?

Does anyone know the procedure for the end of a Consent to let?

Thanks in advance

foxy-stoat

You reapply for CTL, if the lender agrees then happy days, if they refuse then approach a broker to find a BTL mortgage.

Do you and your tenant a favour and do not continue to let the property if you havent got CTL or BTL mortgage.

If you cant get either then sell up and put it on the market.

Lovin_It

Does anyone actually know the implications of letting out a property on a resi mortgage?

I've read in Ts&Cs that Halifax will move you onto a more expensive BTL product if they find out you're letting without permission. It's not exactly a repossession. I'm guessing that's the worst they could do. Possibly no affect on credit rating either.

foxy-stoat

Breach of mortgage contract. No idea if the lender would demand full payment and persue the owner, probably not but I believe mortgage fraud is quite serious.

Invaild insurance - so add insurance fraud to that.

Issues with tenants if the Landlord defaults on the mortgage.

Lovin_It

foxy-stoat, not trying to be argumentative, just trying to understand real life consequences.

Insurance is completely separate to my knowledge. If it's a flat it will be insured by freeholder and automatically covers letting out. If not just take out your own insurance.

Issues with tenants from default, yes, but this question is from landlord's pov, so not his risk.

Mortgage fraud - I hear this a lot. Is that actually a thing?

from halifax website - not exactly the end of the world -

If you let your property or we reasonably believe you have, without our permission:
We can charge you interest on top of another rate you're paying so that there is an added rate; and
We may make you pay a regular additional payment.
We may also backdate the extra interest or additional payments to when you originally let your property, or to when we believe you did so.

fodderstompf

Thanks everyone,

It's a house, and I'm with HSBC who have already told me they won't give me a BTL. I also spoke to a broker who said given my circumstances it would be highly unlikely anyone would.

Wish I had went with Halifax, as 'Lovin It' says, its hardly the end of the world in their T&C.

As it stands I'm getting forced into selling a house I've never once defaulted on. Or I see no ships and risk "mortgage fraud"

Hmmmm don't make it easy do they.

da_rule

Mortgage fraud is fraud by false representation (you lie about your income or you say you want a normal mortgage but I tend to use the property as a BTL property).

It does rely on making a representation so generally only applies at the time of application.

This could be fraud by failing to disclose information. If they are under a legal duty to disclose (contractual duty could be a legal duty) and they don't in order to make a gain for themselves (rental income) then the offence could be committed.

At the very least, once the consent expires, you'll be in breach of contract and open to what ever sanctions or actions the contract says they can take.

foxy-stoat

Lovin_It wrote: »

foxy-stoat, not trying to be argumentative, just trying to understand real life consequences.

Insurance is completely separate to my knowledge. If it's a flat it will be insured by freeholder and automatically covers letting out. If not just take out your own insurance.

Issues with tenants from default, yes, but this question is from landlord's pov, so not his risk.

Mortgage fraud - I hear this a lot. Is that actually a thing?

from halifax website - not exactly the end of the world -

If you let your property or we reasonably believe you have, without our permission:
We can charge you interest on top of another rate you're paying so that there is an added rate; and
We may make you pay a regular additional payment.
We may also backdate the extra interest or additional payments to when you originally let your property, or to when we believe you did so.

Mortgage Fraud - it is a criminal act so you could get a record, plus the fact that you will unlikey be able to get a mortgage for a long time. Maybe in reality no one gets prosecuted for mortgage fraud, I doubt it and certainly wouldnt want to risk it. I am with Halifax and have CTL my property, I wouldnt even think of doing it under the radar as I would have too much to lose, maybe others want to take the risk which is fine but I hope they dont come on here asking for advice when they are found out.

silvercar

Mortgage fraud is applying for a mortgage with the intention of not keeping to the terms and conditions of the mortgage ie applying for a residential mortgage on a property you don't intend to live in.

Letting out a property that wasn't your home isn't fraud as you aren't obtaining more money. It is however a breach of your mortgage contract T&Cs. The lender has options when you breach terms including raising the interest rate or calling in the mortgage. That said, I've never seen a court case where someone has been repossessed for keeping up with repayments.

vics199

Why do you need a BTL mortgage? You can most probably just renew your CTL and stay on your same mortgage product.

i lived overseas for 2 years, now back in the uk. Every 12 months I just reapply for CTL and get accepted. I'm into the 3rd year of this now with no problems. As long as your rent more than covers the mortgage payment then you should get accepted no problem. I wouldn't recommend renting it out without CTL as you'll get fohnd out at some point eg when you decided to change the mortgage product or apply for another mortgage etc.

you say you wish you were with Halifax. I'm with them and they do not offer BTL mortgages from residential anymore. They just keep everyone on CTL and from what their mortgage advisor tells me, they have no problem with this.

fodderstompf

I'm on my 2nd year of CTL, HSBC have informed in writing that this will be the last one I can have and I now need to change to BTL or sell up. But as I say, I don't fit their criteria. Over a barrel really...

I feel like I played it too safe, I know of people who never declared to their lenders and noting happened, but its all if buts and maybe's I suppose. At the time I wanted peace of mind, but its came back to bite me on the backside!