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Do I get consent to let from lender to rent out my house?

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245

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  • paulhutch
    paulhutch Posts: 6 Forumite
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    but do insurance companies check with lenders that consent to let has been sought?
    or if they dont, do they notify lenders that landlords insurance has been purchased on the property?
  • nembot
    nembot Posts: 1,234 Forumite
    edited 25 August 2010 at 8:29PM
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    Changing my residential mortgage to BLT was a one off £95 fee, interest rate remained the same (Abbey, now Santander).

    Insurance (buildings + 10k white goods) was cheaper too - which suprised me.

    You will however have to comply with legal requirements, gas certificate etc.

    This site was invaluable to me when starting off >> http://www.landlordzone.co.uk/
  • NEH
    NEH Posts: 2,464 Forumite
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    paulhutch wrote: »
    but do insurance companies check with lenders that consent to let has been sought?
    or if they dont, do they notify lenders that landlords insurance has been purchased on the property?


    I'm not sure how it works but certainly it would come out if you were to make a claim as they would check then....

    My hubby believes that when he got a quote for landlord's insurance with Direct Line they asked him if he had permission to let....
  • tbs624
    tbs624 Posts: 10,816 Forumite
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    paulhutch wrote: »
    If you are planning to let at a figure way under the market rent then HMRC may have a comment on the arrangement

    please explain this


    See this link on the HMRC webpages, on
    PIM2220 - Deductions: specific items: properties not let at a commercial rent:)
  • Owain_Moneysaver
    Owain_Moneysaver Posts: 11,357 Forumite
    First Anniversary Name Dropper First Post
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    If you fail to tell your lender you are renting out the property, and so evade paying a buy-to-let mortgage rate, you run the risk of prosecution for fraud. You will be in breach of your mortgage agreement, which might be recorded on your credit history.
    A kind word lasts a minute, a skelped erse is sair for a day.
  • leitmotif
    leitmotif Posts: 401 Forumite
    First Anniversary Combo Breaker Name Dropper First Post
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    Owain_Moneysaver wrote: »
    If you fail to tell your lender you are renting out the property, and so evade paying a buy-to-let mortgage rate, you run the risk of prosecution for fraud. You will be in breach of your mortgage agreement, which might be recorded on your credit history.

    Moreover, any breach of a mortgage agreement can be used by the lender as a reason to demand payment of the outstanding balance in full within a relatively short space of time. I'm not saying they would do this, but it's certainly not out of the question. If this scenario did materialise and, as you say yourself, you 'own' less than 30%, then unless you were able to sell your house incredibly quickly you could find yourself facing repossession and subsequent credit blacklisting for a couple of decades, which would even make it hard to pass a credit check prior to just renting a house.
  • wodgerdodger
    wodgerdodger Posts: 186 Forumite
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    Owain_Moneysaver wrote: »
    If you fail to tell your lender you are renting out the property, and so evade paying a buy-to-let mortgage rate, you run the risk of prosecution for fraud. You will be in breach of your mortgage agreement, which might be recorded on your credit history.

    Not all Lenders would automaticaly switch the loan to a BTL rated basis. WE moved abroad in 2008 for 18 months and our Lender , A&L now santander, gave mermission to let and allowed us to stay on the existing products,They needed to see sight of the AST and confirmation that the proposed rent would cover the mortgage.

    I appreciate things have changed over the last 2 years and perhaps even Santander would not be so generous today but if it is the intention to return being a job posting not all Lenders willl react like NR.

    However, failure to gain permission puts you in a very serious position for all the reasons given. I am not convinced legal action for fraud would be instigated but is the ultimate potential.

    Provided mortgage is paid, and that is a big proviso, Lender may not discover infingment of the mortgage conditions but you are taking an enormous risk and so many things could go wrong with your "friends" own circumstances, buildings insurance etc etc it would be ,for me, far too high a risk to take.
  • Blackpool_Saver
    Blackpool_Saver Posts: 6,599 Forumite
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    Does a buy to let mortgage require a 120% equity also ?
    Blackpool_Saver is female, and does not live in Blackpool

  • clutton_2
    clutton_2 Posts: 11,149 Forumite
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    ""If you do a search on here you will find plenty of stories of people who have had done what you are suggesting only for it go horribly wrong"


    show us just one link please ? There has never been ANY repossessions in the last 11 years for not having consent to let.... Lenders dont care to spend time and money on pointless court cases to repossess.. all they care about is getting their money every month....

    Tenants on this forum get quite hysterical about "consent to let" and the truth is that there is no link between insurers and lenders.... The LL has separate contracts with each.

    Lenders insist that landlords have the property insured.. and yet... with all the properties i own... only ONE lender annually asks me to provide annual proof that i have their property insured.... i do, of course i do, but the other lenders don't know if i am insured or not, as the dont ask after the first year.

    When i have had claims on my insurance, claims-adjusters who have come to look at the problem dont ak "have you got consent" they just crack on and sort it out.

    OP has been given good advice about the rent and tax tho... you need to contact HMRC to sort this out..

    Finally, even tho they are friends, what will you do if the tenancy goes wrong ? There have been stories, and they crop up fairly regularly here, of friends taking the mick and if that happens- how are you going to manage court action if you have to evict them from half way round the world ? If the freinds circumstances change and they want to leave after a year, what will you do then ?

    If you then decided to do this anyway, and got a lettings agent involved, the cost to you of their fees, might wipe out any house price increase gain which you are hoping to rely on...

    I let my home to friends years ago when i was abroad and they did not pay the rent at all !!!

    There is a lot to think about
  • NEH
    NEH Posts: 2,464 Forumite
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    clutton wrote: »
    ""If you do a search on here you will find plenty of stories of people who have had done what you are suggesting only for it go horribly wrong"


    show us just one link please ? There has never been ANY repossessions in the last 11 years for not having consent to let.... Lenders dont care to spend time and money on pointless court cases to repossess.. all they care about is getting their money every month....

    Tenants on this forum get quite hysterical about "consent to let" and the truth is that there is no link between insurers and lenders.... The LL has separate contracts with each.

    Lenders insist that landlords have the property insured.. and yet... with all the properties i own... only ONE lender annually asks me to provide annual proof that i have their property insured.... i do, of course i do, but the other lenders don't know if i am insured or not, as the dont ask after the first year.

    When i have had claims on my insurance, claims-adjusters who have come to look at the problem dont ak "have you got consent" they just crack on and sort it out.

    OP has been given good advice about the rent and tax tho... you need to contact HMRC to sort this out..

    Finally, even tho they are friends, what will you do if the tenancy goes wrong ? There have been stories, and they crop up fairly regularly here, of friends taking the mick and if that happens- how are you going to manage court action if you have to evict them from half way round the world ? If the freinds circumstances change and they want to leave after a year, what will you do then ?

    If you then decided to do this anyway, and got a lettings agent involved, the cost to you of their fees, might wipe out any house price increase gain which you are hoping to rely on...

    I let my home to friends years ago when i was abroad and they did not pay the rent at all !!!

    There is a lot to think about


    I'm sorry i didn't have time last night, i wasn't meaning about repossessions i never said that, i just know i read a thread a while back about the penalties it entailed...

    I was also commenting on the fact that my hubby was asked about permission to let when enquiring about ladnlord's insurance...

    Clutton can i ask then you think you can get away with it then? (just curious)
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