Consent to let questions - first time landlord

propertyrental

Assuming this is England, read the stickie at the top of the form board, in particular posts 7, 8 & 9:

This thread is intended to provide information to both landlords and tenants relating to Assured Shorthold Tenancies (ASTs) in England and Wales.



Updated April 2020 to include the Coronavirus Act 2020 and July 2020 to include the Electrical Safety Standards Regulations 2020.

Topics covered:

Post 2: Repairing Obligations: the law, common misconceptions, reporting/enforcing, retaliatory eviction & the new tenant protection (2015) plus the Homes (Fitness for Human Habitation) Act 2018

Post 3: Deposits: Payment, Protection and Return.

Post 4: Ending/renewing an AST: what happens when a fixed term ends? How can a LL or tenant end a tenancy? What is a periodic tenancy?

Post 5: Rent increases: when & how can rent be increased?

Post 6: Repossession: what if a LL's mortgage lender repossesses the property?

Post 7: New landlords (1):advice & information :see links in next post

Post 8: New landlords (2): Essential links for further information

Post 9: Letting agents: how should a landlord select or sack?

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

silvercar

theartfullodger said:

Three points:

a) To be a lettings agent in England requires no qualifications, no training, no criminal records check.  The whole office could be (legally) staffed with ex-prisoners on early release from their sentences for GBH & fraud: Literally! 

Do you have a problem with ex-offenders taking jobs and earning an honest living? It may be an ideal job for an ex-offender now finding his/ her way back into society.

theartfullodger said:

Three points:

.......
II) Consent to let of a limited period sounds fine.  But a tenancy does not end at end of initial term, nor is tenant compelled to leave then.  If you **** up the paperwork such that an s21 (if still around ) was invalid evicting tenants might be impossible/really really difficult.  See e.g 
. this checksheet to see if it would be valid.. 
https://nearlylegal.co.uk/section-21-flowchart/

I've always been puzzled by this one. Presumably mortgage lenders are aware of property laws, so know that tenancies don't end when S21s are served etc. If a CTL was coming to an end and the tenant refused to leave, the landlord would inform the lender that they were doing all they legally could to end the tenancy and the lender would have to acquiesce. After all they could hardly take possession and remove the tenant themselves, given that the tenant is already refusing to leave!

CSI_Yorkshire

silvercar said:

theartfullodger said:

Three points:

.......
II) Consent to let of a limited period sounds fine.  But a tenancy does not end at end of initial term, nor is tenant compelled to leave then.  If you **** up the paperwork such that an s21 (if still around ) was invalid evicting tenants might be impossible/really really difficult.  See e.g 
. this checksheet to see if it would be valid.. 
https://nearlylegal.co.uk/section-21-flowchart/

I've always been puzzled by this one. Presumably mortgage lenders are aware of property laws, so know that tenancies don't end when S21s are served etc. If a CTL was coming to an end and the tenant refused to leave, the landlord would inform the lender that they were doing all they legally could to end the tenancy and the lender would have to acquiesce. After all they could hardly take possession and remove the tenant themselves, given that the tenant is already refusing to leave!

Would it be that 'consent to let' is on residential mortgage conditions, but after the consent it would require a BTL mortgage?

I don't know, I'm just speculating.

gazfocus

CSI_Yorkshire said:

silvercar said:

theartfullodger said:

Three points:

.......
II) Consent to let of a limited period sounds fine.  But a tenancy does not end at end of initial term, nor is tenant compelled to leave then.  If you **** up the paperwork such that an s21 (if still around ) was invalid evicting tenants might be impossible/really really difficult.  See e.g 
. this checksheet to see if it would be valid.. 
https://nearlylegal.co.uk/section-21-flowchart/

I've always been puzzled by this one. Presumably mortgage lenders are aware of property laws, so know that tenancies don't end when S21s are served etc. If a CTL was coming to an end and the tenant refused to leave, the landlord would inform the lender that they were doing all they legally could to end the tenancy and the lender would have to acquiesce. After all they could hardly take possession and remove the tenant themselves, given that the tenant is already refusing to leave!

Would it be that 'consent to let' is on residential mortgage conditions, but after the consent it would require a BTL mortgage?

I don't know, I'm just speculating.

That's what happened with our house when we rented it out with consent to let. The consent to let was for a fixed period then the mortgage lender gave us 3 options: 1) move back in and resume the residential mortgage, 2) sell the house or 3) get a BTL mortgage to clear the residential mortgage.

Options 1 and 3 weren't possible and options 2 and 3 would result in an ERP as the mortgage is on a 5yr fixed term to end in 2027. We ultimately and begrudgingly opted for selling the house but having to pay a £5k ERP for the privilege. 

At no point did the mortgage lender give us the option of continuing with the consent to let.

silvercar

gazfocus said:

CSI_Yorkshire said:

silvercar said:

theartfullodger said:

Three points:

.......
II) Consent to let of a limited period sounds fine.  But a tenancy does not end at end of initial term, nor is tenant compelled to leave then.  If you **** up the paperwork such that an s21 (if still around ) was invalid evicting tenants might be impossible/really really difficult.  See e.g 
. this checksheet to see if it would be valid.. 
https://nearlylegal.co.uk/section-21-flowchart/

I've always been puzzled by this one. Presumably mortgage lenders are aware of property laws, so know that tenancies don't end when S21s are served etc. If a CTL was coming to an end and the tenant refused to leave, the landlord would inform the lender that they were doing all they legally could to end the tenancy and the lender would have to acquiesce. After all they could hardly take possession and remove the tenant themselves, given that the tenant is already refusing to leave!

Would it be that 'consent to let' is on residential mortgage conditions, but after the consent it would require a BTL mortgage?

I don't know, I'm just speculating.

That's what happened with our house when we rented it out with consent to let. The consent to let was for a fixed period then the mortgage lender gave us 3 options: 1) move back in and resume the residential mortgage, 2) sell the house or 3) get a BTL mortgage to clear the residential mortgage.

Options 1 and 3 weren't possible and options 2 and 3 would result in an ERP as the mortgage is on a 5yr fixed term to end in 2027. We ultimately and begrudgingly opted for selling the house but having to pay a £5k ERP for the privilege. 

At no point did the mortgage lender give us the option of continuing with the consent to let.

That seems fairly standard. I’m envisaging a situation where there is a tenant who refuses to move out as CTL is ending. I would then respond to the lender that the situation will be resolved in one of the 3 ways once the tenant is removed and that I was aiming to do so asap.

secla

To me the numbers dont add up for the short term and theres to many pitfalls.
You will need to remove and store your stuff. Jump through all the hoops of making sure the propertys up to current regs for renting etc. EICR, Gas safety blah blah blah. Then from your 1100 you will lose nearly half to fees and tax.

Add onto that when/if your do want to return you will have to go through eviction process which could be simple or very drawn out.

K_S

CSI_Yorkshire said:

silvercar said:

theartfullodger said:

Three points:

.......
II) Consent to let of a limited period sounds fine.  But a tenancy does not end at end of initial term, nor is tenant compelled to leave then.  If you **** up the paperwork such that an s21 (if still around ) was invalid evicting tenants might be impossible/really really difficult.  See e.g 
. this checksheet to see if it would be valid.. 
https://nearlylegal.co.uk/section-21-flowchart/

I've always been puzzled by this one. Presumably mortgage lenders are aware of property laws, so know that tenancies don't end when S21s are served etc. If a CTL was coming to an end and the tenant refused to leave, the landlord would inform the lender that they were doing all they legally could to end the tenancy and the lender would have to acquiesce. After all they could hardly take possession and remove the tenant themselves, given that the tenant is already refusing to leave!

Would it be that 'consent to let' is on residential mortgage conditions, but after the consent it would require a BTL mortgage?

I don't know, I'm just speculating.

@csi_yorkshire There aren't any uniform guidelines so a lot of it is just luck to be honest, depends on which lender you're with at the time.

It ranges from lenders that are extremely particular, will only give a short time-limited CTL, to the other extreme where they'll give you an open-ended CTL (or one that needs to renewed as a routine matter) and allow you to switch the product at the end of the fix, even while on a CTL.

theartfullodger

silvercar said:

theartfullodger said:

Three points:

a) To be a lettings agent in England requires no qualifications, no training, no criminal records check.  The whole office could be (legally) staffed with ex-prisoners on early release from their sentences for GBH & fraud: Literally! 

Do you have a problem with ex-offenders taking jobs and earning an honest living? It may be an ideal job for an ex-offender now finding his/ her way back into society.

theartfullodger said:

Three points:

.......
II) Consent to let of a limited period sounds fine.  But a tenancy does not end at end of initial term, nor is tenant compelled to leave then.  If you **** up the paperwork such that an s21 (if still around ) was invalid evicting tenants might be impossible/really really difficult.  See e.g 
. this checksheet to see if it would be valid.. 
https://nearlylegal.co.uk/section-21-flowchart/

I've always been puzzled by this one. Presumably mortgage lenders are aware of property laws, so know that tenancies don't end when S21s are served etc. If a CTL was coming to an end and the tenant refused to leave, the landlord would inform the lender that they were doing all they legally could to end the tenancy and the lender would have to acquiesce. After all they could hardly take possession and remove the tenant themselves, given that the tenant is already refusing to leave!

I have no problem with ex-offenders taking jobs - IMHO the issue is that the letting agency business in England is almost totally uncontrolled.  (As is the case with Landlords of course).  Suspect many landlords and tenants have had dealings with various rogues working in/as letting agents - in this case was trying to point to the matter for OP who might not have realised.   I have/had relatives who've been inside, indeed my Dad spent 4+ years in prison c/o Mr A Hitler during WW2:  Gave Dad more than usual sympathy with prisoners, hope it rubbed off, he used to go prison visiting quite often. Remember sitting in his car outside Wandsworth nick in my early teens when he was ( very temporarily) "inside".  

Assuming lenders are aware of property laws may lead to disappointment or tears.  Lenders (usually) have the ultimate right to re-possess of course. 

Best regards to all, regardless of your law-breaking history: John 8:7 -  "He that is without sin among you, let him first cast a stone at her."

Murphybear

simon_or said:

Mandatory insurance for the mortgage - landlords buildings insurance 

Optional insurances (all landlord versions not homeowner ones) - Rent Guarantee Insurance, landlords contents, emergency call out cover, legal cover, etc 

Letting agent service - anything from basic tenant-find all the way to "full management". Be warned that irrespective of how expensive they are, it's very hard to find a really good letting agent who knows the laws/regulations around letting, communicates well, etc. Ultimately, as a landlord you hold the responsibility.

Letting agent fee - 12% of monthly rent is fairly standard for fully managed. Do check if that includes VAT or not.

Tax - if your earnings (excluding rent) are in excess of the higher rate threshold then yes all your rental profit (rent less non mortgage expenses) will be taxed at 40%. You will then get a tax reduction of 20% of the interest part of your mortgage payment.

2 tips here.  If you can find a franchised LA, they usually have proper training and ongoing help from the franchise (based on my personal experience).  

Look for an ARLA LA.  To call themselves an ARLA agent a certain percentage of the staff must have passed the ARLA exams.  I passed the Advanced Legal Knowledge exam and it was difficult.  

Note I retired from the business a few years ago so can’t guarantee things haven’t changed.  

Ratkin007

Also check on your local authority website if your property falls within a Selective licensing area. If your property requires a selective licence and you do not obtain one, your tenants could apply for a rent repayment order, up to 12 months and you could also find yourself subject to a financial civil penalty notice.