What is Consent to Let? What You Need to Know Before Letting Your Property.
25. September. 2023
Photo by Percondo CA｜Unsplash
If you are currently holding a residential mortgage, you should seek permission from your mortgage lender or building society to let out your property to tenants. This concept is important because, in the UK, most standard residential mortgages are granted on the condition that the property is occupied by the homeowner.
What is Consent to Let?
Consent to Let is a formal agreement that allows homeowners with a residential mortgage to rent out their property to tenants for a specified period, usually with the intention of generating rental income. It is typically sought when the homeowner’s circumstances change, making it necessary to move out of the property, but they do not want to sell it or switch to a buy-to-let mortgage. In essence, it’s a way for homeowners to temporarily convert their residential property into a rental property.
Reasons to Switch to Consent to Let
- Change in Personal Circumstances: The most common reason for seeking Consent to Let is a change in personal circumstances. This could include job relocation, moving in with a partner, or needing to temporarily move for family reasons. In these cases, homeowners may not want to sell their property immediately and would prefer to rent it out until they can return.
- Financial Considerations: Some homeowners might find themselves in a position where they need additional income to cover their mortgage payments or other financial commitments. Renting out their property can be a way to generate extra income and avoid falling behind on their mortgage.
- Delay in Selling: In a competitive housing market or when facing difficulties in selling the property, homeowners might choose to rent it out temporarily to cover mortgage costs while they wait for more favorable selling conditions.
- Investment Opportunity: Some homeowners see their property as an investment opportunity. They may want to take advantage of a strong rental market or believe that the property’s value will increase over time, making it a viable long-term investment.
How do I apply for Consent to Let?
- Contacting the Mortgage Lender: Homeowners must contact their mortgage lender or building society to request permission to let the property. This is usually done by submitting a formal request in writing, explaining the reason for seeking Consent to Let.
- Assessment by the Lender: The lender will assess the homeowner’s request, taking into account factors such as the homeowner’s financial situation, the property’s condition, and the local rental market. They may also review the homeowner’s mortgage account history.
- Terms and Conditions: If the lender approves the request, they will outline the terms and conditions of the Consent to Let agreement. These terms may include the duration of the agreement, any fees or interest rate changes, and requirements for property maintenance and insurance.
- Informing the Tenant: Once Consent to Let is granted, the homeowner can proceed to find and rent the property to tenants. It is essential to inform tenants that the property is subject to Consent to Let and may be subject to periodic inspections by the lender.
Banks that offer Consent to Lease
Every bank has different regulations, some might charge fees and some might increase rate over time. The costs depend on different types of mortgage and the bank. Here are some bank Consent to Let pages that you could take into consideration.
In summary, Consent to Let in the UK is a process that enables homeowners to temporarily rent out their residential property while retaining their original mortgage. It is distinct from a buy-to-let mortgage. Seeking help from a broker can simplify the process and assist you in finding a suitable type of mortgage.
