Consent to let - How soon after renewal is reasonable?

Gaikokujin

Hello all,

Looking for some input/opinions about a consent to let agreement my partner & I are thinking about applying for.

My partner and I are currently on a 2-year fixed rate mortgage deal with Nationwide that ends at the beginning of January. For various personal/health reasons we have decided we want to take a break in our careers and spend next year travelling before returning to the UK.

From looking on the Nationwide website as existing customers we could apply to switch/renew within 5 months of our current mortgage ending although it technically it wouldn’t come into effect until 3 months before the original deal ends.

Financially we’re not able to switch to a buy to let mortgage and cover the costs of a full 12 months travelling, so our plan would be to renew on a non-BTL option then ask for a consent to let agreement so we can rent the property out while we are away.

How likely do people think it is it that we would be accepted for this and what length of time would people consider reasonable after renewing before we ask to set up a CTL?

Appreciate it’s a bit like asking how long is a piece of string but interested to see what people’s opinions are.

Thrugelmir

CTL is granted on a case by case basis at the lenders discretion.

Your mortgage runs it's full term whatever. A product for a period of time makes no difference to the lenders decision. The NW appear to impose a 1% interest loading.

MortgageMamma

You can apply for consent to let whenever you like but you have to be careful how you word your request to the lender. The soonest I have done one is about 4 months after the rate started for a client who was seconded to the other end of the country, so a solid reason that could not have been foreseen,

In your case your plans are foreseen and there is plenty of time to do the right thing, get a buy to let remortgage on it. They are not especially expensive and you can flip your mortgage onto interest only to reduce the monthly payments that would help maximise your budget whilst travelling.

amnblog

Nationwide will allow this in most cases. Expect them to raise your interest rate by 1% after six months of consent to let.

[Deleted User]

Depending on ltv, a lot of prime buy to let mortgages aren't too far off the residential rates

What part do you feel you are struggling with?

muhandis

We got a CTL from NW about 3 months after a product transfer. It was a simple form, no evidence asked. They tacked on a 1% surcharge from month 7. Our LTV at the time was 80%.

We’re now remortgaging to a BTL and the rates are lower than the NW+1% rate that we’re paying now.

In your place if I had at least 75-80% LTV I would talk to a broker and check out 2 year BTL fixes to remortgage to. Surely being on interest only is much better from a traveling point of view.

grumiofoundation

Gaikokujin wrote: »

Financially we’re not able to switch to a buy to let mortgage and cover the costs of a full 12 months travelling, so our plan would be to renew on a non-BTL option then ask for a consent to let agreement so we can rent the property out while we are away.

This seems confusing? Is this because you don't have enough equity to switch to a BTL?
Because as people have said if you arent able to afford the BTL payments how will you afford the residential (plus any interest increase)?

Gaikokujin

The main reason for thinking a BTL wouldn't be an option is the amount of equity in the house.

We bought it on a 90% LTV and assuming that the value hasn't gone up since purchase our outstanding balance as of this month is around 85-86% LTV. The minimum that Nationwides BTL arm will offer on is 80% LTV and if we were to make overpayments to get to that number it would take a considerable amount out of the funds we have saved up to pay for a year away.

Was also thinking about the fact that our plans are not permanent and we would be looking to return to living in the property within 12 months or so. Obviously that is dependent on getting jobs in the same area but in the same way you cannot rent out a property when you have a residential mortgage am I right in saying you can't live in a property you have a BTL mortgage on? Meaning we would need to switch back to a residential mortgage and given we will have had no wages/income for the previous 12 months not sure how easy that will be?

Gaikokujin

amnblog wrote: »

Expect them to raise your interest rate by 1% after six months of consent to let.

This used to be the case but the wording on their website has altered to remove any reference to the six month period so think they may have changed it to a raise of 1% from day one.

amnblog

If there has been a change it is very recent.

Most likely no reference to the '6 months' to give them room to apply the 1% from 6 months after the property is let rather than 6 months after the C2L request.

gj373

If you are planning on returning to the property to live in after 1 year travelling I would be very wary about renting the property. You have no guarantee the tenant will leave when you ask them to and it could end up costing you more in legal fees.

I'm not saying don't do it - just think very hard about whether it is worth it.