Do you have consent to let?

 
01/07/2024

What is Consent to Let?

'Consent to let' is a temporary arrangement, typically lasting between 6 to 24 months, depending on the homeowner’s needs and the lender’s policies. It allows property owners to legally rent out their homes even though they have a residential mortgage.

This option is ideal for scenarios such as when a homeowner is relocating for work temporarily, moving in with a partner while waiting to sell their home, or if they are a member of the armed forces on deployment.

For those looking to rent out their property long-term, it’s necessary to switch to a buy-to-let mortgage.

Why is Consent to Let Needed?

Buy-to-let mortgage rates are generally higher than those for residential mortgages, and lenders often impose stricter criteria due to the increased risk of rental voids or tenant non-payment. Consequently, some homeowners might be tempted to rent out their property without informing their lender, but this breaches most mortgage agreements and constitutes mortgage fraud.

Consequences of Not Obtaining the Correct Permission

Landlords who rent out their property without the correct mortgage or 'consent to let' could face several penalties, including:

  • A fine
  • Increased interest rates
  • Additional interest back payments
  • Invalidated buildings insurance (as a specialist landlord’s insurance policy is required)

In the worst-case scenario, the lender might demand full repayment of the loan or issue a possession order. This could significantly impact the landlord’s credit record, making it difficult to secure future loans.

For tenants, renting a property without the landlord having obtained consent to let can also carry risks:

  • Tenants could become 'unauthorised tenants', lacking the same legal protections as authorised tenants.
  • The tenancy terms might not be binding on the lender, potentially leading to eviction.

Securing consent to let is essential for protecting both landlords and tenants, ensuring compliance with mortgage terms and safeguarding the legal rights of all parties involved.

 

Our lettings experts are on hand in our Lyndhurst, High Street office if you have any further questions about renting your home.

 
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