Giving a reason for Consent to Let - how much can the mortgage provider check?

MattFF · 3 May 2020 at 1:03AM

To cut a long story short: I bought a house 2 years ago with my wife; we divorced a year later, and my friend bought in on the house, taking over (roughly) half of the mortgage; now we're thinking of moving out within a year or two - I want to move to a different city but commute to my current job, he wants to move abroad to work for at least a year (but probably 3).
Now the problem is, we have a 5 year fixed rate mortgage with over 3 years of the term remaining, and an unsavoury early repayment charge of £12k. Our ideal solution is to continue jointly owning the house, and rent it out completely. For this, as I understand it, we'd need to get Consent to Let from Santander. The alternatives are (1) sell the house, or (2) remortgage with a Buy to Let. In either of these cases we'll have to pay the £12k (as porting the mortgage isn't an option).

I've no idea how strict/willing Santander are with granting Consent to Let. I've read things from others saying that the bank needs to believe: "we didn't buy the house with the intention of renting" or "the reasons for us moving out are beyond our control".
My reason for wanting to move to a different city is that I want to because I'm a bit miserable in this city, which isn't "reasons out of my control". Which brings me to my question: If Santander were to ask me what the circumstances for me 'having' to move are, and I was to tell a white lie like "I'm moving into my girlfriend's place" that they're more likely to believe, do they have any means to check things like this? If I was to say 'moving jobs', then they could reasonably expect proof as this is a change in circumstances pertinent to the mortgage. But what about a reason which isn't pertinent, such as my example?

Thanks!

Mahsroh · 4 May 2020 at 8:32AM

A few years ago I got Consent to Lease with a different lender and I explained to them quite honestly that the reason for the change in circumstances (I was single and working away from home at the time) was that there was no point living in a house that I only spent two night a week in, when I could move back in with my parents at the time for those couple of nights a week I was spending "back home". They had no problem with this and it certainly wasn't "out of my control". Although admittedly they did say the fact I wouldn't be paying a Mortgage / rent on another property helped my case in terms of affordability. But then my circumstances changed a couple of years later when I did permanently relocate into a rented property and seemingly they had no issue with this either. They never asked for verification / proof of any of the above. Obviously every lender has different criteria and Santander may be stricter though....

What I will say, is you need to crunch some numbers. When I got my consent to lease the interest rate went from 3% above base rate to 4.79% above base rate (both variable). I didn't have the LTV at the time so was stuck but I've subsequently switched it to a buy to let with another lender at 2.38%.

I don't know the size of your Mortgage, but with ERC's of £12k i'm guessing it's fairly substantial? You may find it's actually financially beneficial to pay the £12k to get a better deal on a buy to let. Even if Santander do give you Consent to Lease, it'll likely be at a cost.

Without knowing the specifics of your Mortgage (current rate, remaining term, outstanding balance etc.) it's hard to say for certain though. But if your mortgage is say £250,000 over 25 years the two rates i've used above (CTL vs BTL) make roughly a £250 difference each month to the Mortgage repayment and the amount of interest paid over the length of the Mortgage is more that double on the consent to lease rate! In that example, you'd get your £12k back quicker than you think.