consent to let help

Brum2312

Hi MSE
I'm new here so not sure if I should post this in the mortgage section or here. Apologies if its wrong!
Ill try and keep it short and sweet but please ask for details if im not clear on anything!


I have a 2 bed house in Birmingham city centre, last Christmas I met my girlfriend. Things are going rather well and I honestly can see us spending the rest of our lives together. I'm moving in with her in the new year. She lives in London.


I don't want to sell my house as i genuinely believe property prices in Birmingham can only go up. When the new HS2 line finally arrives (2026) my house is really in a great position to rent/ potentially for us to rather a family in and commute to London or wherever we may be working then. Even if we sell it one day, i believe it will be worth considerably more in the future than now.


I wont be living in it, and want to rent it out. I think I do anyway! I have checked with my mortgage broker and in short, i cant afford a Buy to let mortgage and he said I should phone my mortgage provider and ask about their consent to let policies.
Basically I wondering If you guys know if there are some lenders which are more likely to consent to let than others. My mortgage with with Barclays and its a tracker mortgage.

If barclays dont consent to me letting it out, my options are basically to sell it, or rent it out regardless and hope i dont get found out. Presumeably this is fraudulent on many levels, I havent really put much thought into this idea yet.

Am i just trying to have my cake and eat it?

Any tips on what I should say to barclays? I figure consent to let is more for necessity than choice like in my situation!
TYVM for any help!

Cornucopia

Brum2312 wrote: »

I have checked with my mortgage broker and in short, i cant afford a Buy to let mortgage...

What reason did the Broker give?

... and he said I should phone my mortgage provider and ask about their consent to let policies.
Basically I wondering If you guys know if there are some lenders which are more likely to consent to let than others. My mortgage with with Barclays and its a tracker mortgage.

Typically, the things lenders look at on Consent to Let are: how long the Mortgage has been running for (ISTR 2 years minimum for many lenders), whether the Mortgage account has been well-managed, whether the increased CTL rates/fees remain affordable, and whether the property appears suitable.

If barclays dont consent to me letting it out, my options are basically to sell it, or rent it out regardless and hope i dont get found out. Presumeably this is fraudulent on many levels...

Yes - don't do this, it will get VERY messy.

Any tips on what I should say to barclays? I figure consent to let is more for necessity than choice like in my situation!
TYVM for any help!

More a question of being prepared for any questions they may ask - in particular, work out your rental figures before speaking to them. See if you can find out how they charge for CTL, and factor that in. Make sure that there is a good profit from renting to allow for any upwards move in interest rates. Be prepared to offer to go on to a fixed rate to reduce the risk of rate rises.

AdrianC

You won't be able to remortgage on a residential mortgage and get CtL straight off the bat.


I presume the reason you can't remortgage onto a BtL mortgage is that you don't have sufficient equity to meet the 75% max LtV?

Brum2312 wrote: »

Am i just trying to have my cake and eat it?

Yes.

Have you actually worked the numbers out?
What yield are you working off?
How much have you allowed for voids, for agency fees, for maintenance and repairs?
How does that compare to your mortgage payments?
How much do you have in reserve for worst-case scenarios?

Forget about capital growth - that's not what you base rental viability off. That's the jam on top of the bread of the yield.


This isn't the relationship board, but... You're only a year into a long-distance relationship. Are you SURE it's "the one"...? What happens if it all goes pear-shaped, and you want to move back to your nice house just after the tenants have renewed a 12mo fixed tenancy...?

jonnygee2

or rent it out regardless and hope i dont get found out.

There are many scenarios where committing fraud will be of benefit to you. you could also try and cheat the benefits system or fiddle some money from your workplace. Are there any other types of fraud you are thinking about committing out of interest?

tlc678910

Hi,
I don’t have specific experience of consent to let with Barclays but with Nationwide.

I would ask your current mortgage for the consent to let rather than move mortgage and then try to get consent to let on a new mortgage. Once you have consent to let you will be stuck on your mortgage rate and when any offer rate expires the standard rate. You can’t get a new rate while letting (you can’t with Nationwide anyway).

Some banks charge a fee to grant permission. Some charge a higher interest rate on top of your usual rate. The permission might only be for a limited time period, with Nationwide it was 3 years but renewed ok.

(As you can see in the link below) you need to emphasise that your motivation to let the property is temporary. I don’t think this involves lying as your post suggests you may want to move back with your partner in the future, and if your relationship was to break down you may also want to move back.

I think you can be honest that you would like to try living with your partner before you decide to sell and also you would like to move back in if you can both get jobs you can commute to.

This link shows extra terms, like your mortgage must be up to date, but assuming you meet them I expect you would be ok.
https://www.barclays.co.uk/mortgages/existing-customer-centre/consent-to-let/

Thrugelmir

What's your employment situation? In many cases CTL is granted due to work relocation on a temparay basis. CTL isn't a long term option as far as many lenders are concerned.

bris

jonnygee2 wrote: »

There are many scenarios where committing fraud will be of benefit to you. you could also try and cheat the benefits system or fiddle some money from your workplace. Are there any other types of fraud you are thinking about committing out of interest?

It's not fraud, fraud is a criminal offence.


This would be a breach of contract so a simple civil matter between the bank and the OP.

babyblade41

For what my advice is worth (probably not much) but if you want to be a LL then go ahead, but it is not just the renting out of a property and sit back whilst watching your investment grow and collecting the rent.

It is far more complicated and so many financial factors that need building into the equation.

Even if you get the consent to let , what sort of demographic are you looking into and what yields are possibly available building in vacant tenants and all sorts .

Being a LL can be a challenge and are you prepared to face it responsibly?

I only have one now and that's because it will be long term but as well as it can be rewarding it can also be tough and frustrating.

If there is such a small equity in the property you propose to let would the figures add up?

I'm not sure what I would do in your position re: relationship (I'm the worst person to ask) but being a LL is a commitment , just make sure you know as much as possible before you venture down that road... it's not for everyone

I'm not sure if I read somewhere or heard it on the news but if a labour government came into power they were trying to get a 2 year minimum contract for HB tenants ( I may be mistaken) ..it's something you need to consider

dimbo61

You need to find out what your property might rent for ?
How much is the current mortgage ?
Ask Barclays for consent to let and see what they say !
You need to speak to your girlfriend about your ideas !
Will she be happy to have you move in ?

Brum2312

dimbo61 wrote: »

You need to find out what your property might rent for ?
How much is the current mortgage ?
I pay 1700 per month at the moment. Its a tracker so its not going to get any lower than it currently is.
Ask Barclays for consent to let and see what they say !
Think that's basically my only option!

You need to speak to your girlfriend about your ideas !

We have done extensively. She is in a similar position with a relatively new mortgage. We fully understand it is early days. Neither of us is pushing the relationship and if I'm honest so far so good. We are both rational sensible career focused people, just trying to make the best of what we have available to us.



Will she be happy to have you move in?

Fingers crossed! We have been staying at each others places for weeks on end anyway. Of course its early days but we are at that stage where its time to move up a level.

Its kind of a shame that HS2 isn't already here! being 55 minutes from central London would probably mean we would move to Birmingham and we would rent her London place out for significantly more!



Thanks everyone for your help!

macman

bris wrote: »

It's not fraud, fraud is a criminal offence.


This would be a breach of contract so a simple civil matter between the bank and the OP.

Indeed. And letting it without consent and informing the insurer will of course invalidate the buildings insurance should the tenants burn it to the ground. That would be a 'simple civil matter' too.