Buy to let mortgage - tenant conditions

nudda

Is anyone aware of there being conditions on the type of tenants allowed to live in your property under buy to let?

Situation: Current tenants have privately rented a house out for 16 years. Landlord has now remortgaged the house and is saying because the tenants are receiving housing benefit (even though its towards the rental amount, not all of it) the landlord can no longer keep them in the house under the new buy to let mortgage. Apparently the mortgage is with Barclays.

Is this true? Are there any documents online I can reference?

Thanks

ACG

Some lenders do not allow DSS tenants I think - BTLs are not really my bag so I could be wrong, but it sounds plausible. Whether or not it is true is another matter, but the landlord is free to go through the eviction process for more or less any reason I thin.

Might be worthwhile speaking to a solicitor if you are the tenant?

Thrugelmir

Providing the Landlord follows due process. There's nothing to stop the Landland terminating the tenancy agreement.

Possibly due to the long term relationship. This is just a polite way of giving notice. When the real reason is commercial.

silvercar

Generally these days, housing benefit is paid to the tenant, with the intention that the tenant uses it to pay their rent. As such a landlord may be totally unaware that the tenant is in receipt of housing benefit. It is also the case that the majority of housing benefit recipients are working and they receive a relatively small amount of HB to top up their income to supplement their rent.

So for a mortgage lender to specify no housing benefit tenants is very out dated and possibly untrue.

(In the same way that a general "no benefits" clause would be unworkable as most families that are renting would receive working tax credits, child tax credits or similar.

My insurance requires that the tenancy agreement is between the landlord and tenant rather than landlord and say council or housing association, but that is the only restriction. Note that it is from the insurer not the lender.

amnblog

Some Lenders do have a problem with DSS tenants in various forms.

Barclays say the following is unacceptable..

'Direct letting to tenants from the local authority housing waiting list i.e. the tenancy agreement is between our borrower and the tenant, rather than our borrower and the local authority who may subsequently then let to the tenant (which is acceptable)'

Further

'The BTL property must not be classed as a HMO subject to any form of licensing by the Local Authority '

silvercar

amnblog wrote: »

Some Lenders do have a problem with DSS tenants in various forms.

Barclays say the following is unacceptable..

'Direct letting to tenants from the local authority housing waiting list i.e. the tenancy agreement is between our borrower and the tenant, rather than our borrower and the local authority who may subsequently then let to the tenant (which is acceptable)'

Further

'The BTL property must not be classed as a HMO subject to any form of licensing by the Local Authority '

Interesting. NatWest say the opposite (or did when I took the loan). Tenancy has to be between landlord and tenant, not a third party.

amnblog

That's what we love about Lenders.

Pixie5740

It's a good job the DSS hasn't existed since 2001 then.

Pixie5740

nudda wrote: »

Is anyone aware of there being conditions on the type of tenants allowed to live in your property under buy to let?

Situation: Current tenants have privately rented a house out for 16 years. Landlord has now remortgaged the house and is saying because the tenants are receiving housing benefit (even though its towards the rental amount, not all of it) the landlord can no longer keep them in the house under the new buy to let mortgage. Apparently the mortgage is with Barclays.

Is this true? Are there any documents online I can reference?

Thanks

It doesn't really matter if it's true or not. Assuming this property is in England or Wales the landlord doesn't need a reason to evict tenants using the Section 21 route.

nudda

Pixie5740 wrote: »

It doesn't really matter if it's true or not. Assuming this property is in England or Wales the landlord doesn't need a reason to evict tenants using the Section 21 route.

You are jumping ahead. The landlord wants to keep the tenants on but is being forced by new BTL mortgage to replace the tenants because they are on housing benfeit. Of course the landlord can evict tenants for any reason - goes without saying.

newbie1980

nudda wrote: »

You are jumping ahead. The landlord wants to keep the tenants on but is being forced by new BTL mortgage to replace the tenants because they are on housing benfeit. Of course the landlord can evict tenants for any reason - goes without saying.

please note the landlord did have a choice

he could have picked a mortgage that allowed LHA payments but he didnt

i feel there is something underlying to this

maybe the rent is not at market rate if they have been there 16 years and feels he cant ask the current tenants for that rate so wants to rent it to someone who will pay market rate

i wouldnt have been so quick to do this though as a long term tenant is worth there weight in gold