Building Society charges for right to rent

Overthehilary

I have recently let my property and slipped up by not asking my Building Society for permission in advance.

Normal practice is that in order to gain permission, I have to fill in a form which they issued (1 page and a bit). They want me to pay up front the sum of 225 pounds. When I asked for a breakdown of the charges (in light of the current charge issues) they informed me, yes but it will cost me 10 pounds.
Any comments, please as I am not sure if these charges are reasonable?

The second issue which I wonder if anyone else will find thought provoking is that when I asked if I was likely to be in trouble for letting before asking for permission, I was told 'No, there's nothing we can do about it now.'
Strange?

I'd be really pleased to receive any advice about how to handle the charges issue - as I am advised to send my form and money in asap and that if there is a query with the charges, I have to wait and claim them back.

ncooper1974

I know friends that, like you, used to live in their property before then moving out and letting it out. And they are still on their original residentual mortgage.
I did ask them why they haven't changed, and like your lender says, there really isn't anything they can do about it.

He is under the impression that as long as you keep up your payments, then they lender is happy, and dont need to know who is living there.
However, should you then fall into arrears, it might be held against.

while i'm not saying to go down this route, if you do decide to ignore the right to let from your lender, then simply let out your property and ensure you're payments are on time. Also, dont forget to change your correspondance address from the property to your new address or your yearly mortgage statements will continue to be sent there!

moneysavinmonkey

if you don't have permission to let then doesn't it technically mean that your tenancy agreement is void... hope your tenant doesn't find out as they might legitimately stop paying rent!!

you potentially cannot fulfil your contractual obligations... without permission to rent the tenant will not get their normal statutory notice period if the house is repossessed.

silvercar

The £225 charge would have been detailed in your original mortgage terms and conditions. SOme lenders also increase the interest rate!

When you took the mortgage you would have agreed to this, so little point complaining.

Vaux-Hall

ncooper1974 wrote: »

Also, dont forget to change your correspondance address from the property to your new address or your yearly mortgage statements will continue to be sent there!

Actually that's the last thing you want to do, as you are potentially alerting them to the fact you don't live there any more. You can get the Post Office to forward your post for around £34/year, and ask the tenant to let you know if anything erroneously turns up for you, so you can pick it up.

poppy10_2

£225 sounds like a reasonable standard charge for switching a mortgage to BTL - I don't see what your grounds for appealing against it would be.

Overthehilary

Thanks for your help everyone who has taken the time to reply.

I think that maybe I gave a wrong impression. I know it isn't relevant to the facts ... but I haven't let my property for a profit, simply to pay the mortgage as I have to live abroad for a time and do not own any other property. I will need a place to live in my old age and don't want to rely on the state. The buy-to-let mortgage will only apply when my current deal runs out. I don't want to lie to anyone but I thought that the charges were high, just for a short form and a letter of permission.
I am aware that the charges were probably detailed in the mortgage contract, but then, so were the redemption fees etc. and bank charges for bank accounts, some of which have been found to be excessive.
Am I adrift?

moneysavinmonkey

As an example...

If you have a residential mortgage and you fall behind in the repayments then the mortgage company can repossess your house, sell it and get their money back.

Now say they have given you permission to let and you have given a 12 month lease to a tenant... for whatever reasons you stop paying the mortgage but the tenant is still paying the rent. The mortgage company now repossess your house but they can not evict the tenant until the end of their 12 month lease, meaning they can't sell the house and get their money back

For that added risk factor alone I would have said £225 was a bargain.

niallmitch

moneysavinmonkey wrote: »

As an example...

If you have a residential mortgage and you fall behind in the repayments then the mortgage company can repossess your house, sell it and get their money back.

Now say they have given you permission to let and you have given a 12 month lease to a tenant... for whatever reasons you stop paying the mortgage but the tenant is still paying the rent. The mortgage company now repossess your house but they can not evict the tenant until the end of their 12 month lease, meaning they can't sell the house and get their money back

For that added risk factor alone I would have said £225 was a bargain.

This isnt strictly true - I had a 6 month lease in a rented property and three months in the bailiffs turned up at the door and said they had an eviction order as the house was being repossessed 1 week later. We were out no matter our lease terms - got a council house out of it so eventually turned out ok but wasnt pleasant

Overthehilary

I take your point but the Building society can see that even if I defaulted (and quite frankly, I wouldn't dream of it) there is enough equity in the property to sell it with a sitting tenant and still get their money back.

Overthehilary

Niallmitch - I'm sorry that happened to you.