Help to buy remortgage issues

rade84a

Hello,

9 years ago I purchased a flat on a first time "help to buy mortgage" with the intention of the property being my home and therefore purchasing it on a residential mortgage. I am now looking to remortgage as it is coming to the end of the 10 year term of the help to buy deal and I am having some issues in doing so - I was hoping some more experienced and wise heads might be able to help me?

The situation is as follows:

- 9 years ago, purchased flat on help to buy government scheme
- This was a residential mortgage
- Purpose was for me to live in it, but after three years my circumstances changed and I have to leave the country for 4 years
- I let the property out with the help of Halifax who agreed a consent to lease on the property
- 4 years later, I have moved back to the UK, but working in different parts of the country as part of a training scheme in the NHS and I cannot have a fixed abode for longer than 1 year. (this will continue for another 8 years or so)
- Therefore I have continued letting the property out
- This has not been with the intention of making money on the property, but an alternative to selling it
- Halifax were aware of the situation - I called them up to ask for an extension to the consent to lease. It was not granted, but after explaining my situation, they added 2% onto the standard variable rate of the mortgage in light of it being let out. This was a solution agreed with the bank as an alternative to selling the property as I would not have been able to live in it myself.
- I have continued since 2014 to have this "arrangement" with them

Terms of the Help to Buy deal
- Initial 95% LTV, taking out mortgage on 75% of property price
- Bank / developer hold remaining 25% for up to 10 years
- Before 10 years is up, you need to either 1. Sell the property or 2. Remortgage for the full amount.

- I have sufficient equity in the property now to get a 70% LTV mortgage on 100% of the property by buying out the remainder.
- I have attempted to remortgage now with another provider
- All other providers are asking for consent to lease confirmation to be sent to them from Halifax for the EXISTING mortgage, before they can offer me a mortgage in principle.

Problem
- Halifax are now saying that the tenancy is unauthorised as the consent to lease ran out in 2014
- As such they cannot provide a letter to confirm that there is a consent to lease for the property, nor that there is an authorised tenancy in the property at the moment
- I have spoken to my broker - they absolutely need confirmation of consent to lease to continue.
- Halifax initially told me there is nothing I can do, and I should sell the property.
- I escalated this through various levels within the complaints department and spoke to the team manager who eventually stated that they will try to help
- According to her 1. Offering to increase the SVR by 2% (their suggestion, not mine), was not meant to signify any agreement by the bank that I was allowed to rent it out. 2, As such it remains an unauthorised tenancy. 3. The 2% is a penalty for an unauthorised tenancy.

- Halifax will write a letter stating I had consent to lease for a few years, but after it expires their policy states it cannot be renewed. On this occasion, they increased the SVR by 2% as I informed them that the property was still being let out. The 2% "charge" on top of the SVR continues to this date because the landlord (me) has informed the bank that the property is still being let out.

- She said they won't mention that anything is unauthorised, but they cannot specifically confirm in writing there was any agreement made on their part that it could be let out. They cannot be any more helpful than this, because according to her, they will get into trouble (with the FCA I presume?).

The problem now is that the mortgage companies won't accept this as there has been a period in which the property has been let out without a consent to lease.


1. Does anyone have any suggestions how I might be able to get around this issue and get a BTL mortgage?
2. I dont understand how the current status of the mortgage has anything to do with myself wanting to remortgage and get another product??


Apologies for the long post!!!

Many thanks for your help

kingstreet

rade84a wrote: »

I dont understand how the current status of the mortgage has anything to do with myself wanting to remortgage and get another product??

Is this remortgage to residential, or buy to let?

Is the current tenant remaining in-situ?

sal_III

I believe you have a bigger problem. Not sure what the terms of the HTB scheme you used 9 years ago were, but the current HTB scheme in E&W circa 2013 absolutely forbids letting out the property.

rade84a

Hello both and thank you for your replies. The remortgage is to BTL and yes the current tenant would be remaining in situ.

Regarding the forbidding of renting the property out, I am unsure about this and it is a concern to me now that you mention it. However, renting the property out was done only with with the permission of 1. The property developer and 2. The mortgage provider. Together they provided the consent to lease to me initially and have conitinued to not have any objections to it being let out. I was also told by the broker that the mortgage providers know of a clause for forces personnel who can get a consent to lease on the HTB scheme but they haven!!!8217;t seen it for other jobs.

kingstreet

This is pre-HTB (from 04/2013) shared equity.

There were a number of developer schemes out there and the Government's were HomeBuy Direct, FirstBuy and FirstTime Buyer's Initiative.

Information on all of them is available from the post-sales HTB Agent;-

https://www.myfirsthome.org.uk/