Lenders who allow lodgers

SlyQ

My son is a first time buyer, and has a good deposit. He is considering the option of having a lodger in the future if things get tight financially. He does not want a 'lodger' mortgage, which I have heard of. He has applied for a NatWest mortgage but I have found out that they do not agree to having lodgers. (I happen to have a mortgage with them and asked the question). So he needs to know which lenders would be agreeable, should the need arise later. I have searched online but there is no information. Do you know which lenders are agreeable, as he has made an offer on a house so needs to get a mortgage agreed ASAP. Thank you

[Deleted User]

SlyQ said:

My son is a first time buyer, and has a good deposit. He is considering the option of having a lodger in the future if things get tight financially. He does not want a 'lodger' mortgage, which I have heard of. He has applied for a NatWest mortgage but I have found out that they do not agree to having lodgers. (I happen to have a mortgage with them and asked the question). So he needs to know which lenders would be agreeable, should the need arise later. I have searched online but there is no information. Do you know which lenders are agreeable, as he has made an offer on a house so needs to get a mortgage agreed ASAP. Thank you

That's odd.  Most lenders allow the mortgagee to have a lodger and NatWest are one.  It's more unusual to find a lender than doesn't allow the mortgagee to have a lodger.  

SlyQ

That's what I thought, from having read anything I could find about lodgers. But because he was worried about it I did a webchat with NatWest and was transferred to the mortgage department who categorically told me -

NWB Good afternoon, how are you today? I can see that you are querying about being able to rent out a room of your property. If you have a residential mortgage, this isnt something that you would be able to do unfortunately. You would only be able to rent out the full property (if you were moving elsewhere) or you can have a family member/friend stay with you as a lodger but are unable to rent out a room unfortunately

Me Maybe I used the wrong wording-I am considering having a paid lodger. Is that the same as renting out?

They would just have one room, whilst we continue to live here.

NWB That would be the same unfortunately; you wouldnt be able to rent out a room to someone and receive rental income/have a tenancy agreement in place with them, have locks on bedroom doors etc

Me Oh, I thought most lenders were happy with the 'rent a room scheme'?

NWB I wouldnt be able to say about other lenders, it may be something that they would allow under residential mortgages but its not for Natwest & RBS I'm afraid

Me OK thank you

Thrugelmir

SlyQ said:

 He is considering the option of having a lodger in the future if things get tight financially. 

Hold back from purchasing a property until his financial position is healthier. 

princeofpounds

Sounds like the agent at Natwest didn't know what they were talking about to be honest.  All this talk about 'tenancy agreement, locks on bedroom doors, renting out the full property' makes it clear that they are confusing the concepts of lodgers and tenants in their mind. That's not to say they are wrong in the ultimate answer (although there's a good chance they are) but I wouldn't take it at face value one little bit.

ElephantBoy57

I asked my mortgage company, The Coventry and they were not interested, just said for me to go ahead.

Your NWB probably have hundreds/thousands of staff giving answers, most likely lodgers are allowed.

Rambosmum

I had a lodger with Natwest and they didn't care. They didn't want a lock on the room (but we didn't either) and that was that. Also had lodgers with Woolwich and with Halifax. 

MaryNB

Halifax said I could have up to 2 lodgers but said the rental income isn't included as part of the affordability assessment. 

macman

The only organisation you need to inform about a lodger is possibly your insurer, as it could affect the premium.

greatcrested

The customer services adviser is not a legal expert and does not fully understand the difference between a tenant and a lodger.

He is right in the sense that letting a room under a tenancy would not be allowed, but under a licance, to a lodger? I've yet to hear of a mortgage lender prohibiting this.

Post 10: Lodgers: advice & links for landlords & lodgers

oldbikebloke

SlyQ said:

That's what I thought, from having read anything I could find about lodgers. But because he was worried about it I did a webchat with NatWest and was transferred to the mortgage department who categorically told me -

NWB Good afternoon, how are you today? I can see that you are querying about being able to rent out a room of your property. If you have a residential mortgage, this isnt something that you would be able to do unfortunately. You would only be able to rent out the full property (if you were moving elsewhere) or you can have a family member/friend stay with you as a lodger but are unable to rent out a room unfortunately

Me Maybe I used the wrong wording-I am considering having a paid lodger. Is that the same as renting out?

They would just have one room, whilst we continue to live here.

NWB That would be the same unfortunately; you wouldnt be able to rent out a room to someone and receive rental income/have a tenancy agreement in place with them, have locks on bedroom doors etc

Me Oh, I thought most lenders were happy with the 'rent a room scheme'?

NWB I wouldnt be able to say about other lenders, it may be something that they would allow under residential mortgages but its not for Natwest & RBS I'm afraid

Me OK thank you

that shows the person you spoke to does not understand what a lodger is, was not taking in your attempt at explaining it, and almost certainly gave you the wrong answer. Bet if you phoned again you would get a different answer. 

- tenancy agreement is irrelevant to your question and should not have been mentioned in any answer 
- mere presence of locks on doors is not a determinant, the issue is does the landlord have the key and enter the room "regularly"