Can't make a profit when renting via Barclays permission to let?

Jake6192

So this is fairly similar to another post ( /discussion/6218928 ), but with some slight differences.

I am trying to rent out my property, as I will be moving overseas to work very soon (within the next month). It is a residential mortgage, and when initially opened I was intending on living in the property myself, but circumstances have changed since then. I have tried to inform Barclays (my mortgage provider) of all the above, and have learnt that I have 2 options:

1. Permission to let. Which means I cannot make a profit on the rental - I can only charge my monthly fees. Which would include mortgage payments, rental management fees, building insurance, rental tax to HMRC etc. I cannot find any documentation from Barclays' sources indicating this other than the multiple advisors I have spoken to on the phone - who are all adamant that this is the case and their current policy.
2. Buy to let. Which would mean that I would have to remain in the UK for the full tenancy of the property - which is nearly impossible for me as I have to move overseas for training which will be leading into a full time job.

So realistically permission to let is the only option I can take, but I would be relying on profits from the rental to keep me alive during the 6-month training period before I actually start the work. So I am honestly at a complete standstill here, and have no idea what to do. It just seems like the most ridiculous rule I have ever heard of, as my plans were to try and get a few more properties on the portfolio and have a constant income from these as I chase my other endeavours. But now I feel like I've hit a brick wall and have no other way over over it other than switching mortgage providers which will just take too long.
Are these truly my only 2 options? Or could I switch my mortgage type from residential to some other type which would allow me to profit?

K_S

@jake6192 The conditions that you sign up to when getting CTL from Barclays are all listed in the form here 
https://www.barclays.co.uk/content/dam/documents/personal/mortgages/9908869_UKPermissionToLetApril2021.pdf

The only thing I can see mentioned on there re rent is that it should be sufficient to cover the monthly mortgage payment, so nothing about an upper limit. I've only skim read so may have missed something but give it a good read if you haven't already.

Once you're overseas with a paying tenant in, you can then look at remortgaging away to an interest-only BTL mortgage with a lender than considers expats.

Jake6192

@K_S
Thank you for your input.
So I have read through theses terms, and you are correct - there is no mention of an upper limit. There is also no mention of the case if I am overseas - only under the "Help to buy" section is this mentioned which does not apply in this case.
So could I not just go for the the permission to let indefinetly? And why would the multiple advisors I have spoken to from barclays say that I cannot profit if it is not mentioned anywhere in these terms?

K_S

Jake6192 said:

@K_S
Thank you for your input.
So I have read through theses terms, and you are correct - there is no mention of an upper limit. There is also no mention of the case if I am overseas - only under the "Help to buy" section is this mentioned which does not apply in this case.
So could I not just go for the the permission to let indefinetly? And why would the multiple advisors I have spoken to from barclays say that I cannot profit if it is not mentioned anywhere in these terms?

@jake6192 Without going into too much detail, the borrower being overseas part is entirely separate to the CTL so I wouldn't expect it to be included in the CTL conditions.

I can't really speak for Barclays, and I'm just going off the form which I would expect to include any rent-level specific conditions if there were any. But perhaps I'm wrong and they do have such a condition. Perhaps the form hasn't been updated yet, etc.

It's important to remember that consent-to-let on a residential mortgage is not a right, it's a departure from what the loan was advanced for. That being the case, whether to give permission or not is entirely at the lender's discretion. They can and do change their policies periodically.