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Consent-to-let
What is consent to let?
A consent to let is a formal agreement with your mortgage lender giving you permission to let your home on a temporary basis, without changing your residential mortgage.
Not all lenders offer consent to lets, and certain home ownership mortgages, such as Help to Buy, usually won’t allow the use of consent to let. However, it's worth reaching out to your lender to ask.
Is there a consent to let mortgage?
No there isn't. A consent to let is simply a formal agreement that is attached to your existing mortgage. If you wanted to take out a mortgage to let a property on a long-term basis, you'd need to swap to a buy-to-let mortgage.
When do you need to get a consent to let?
There are a wide range of valid reasons for consent to let that a mortgage lender may consider:
Temporary relocation
This could due to work demands, e.g those regularly posted abroad, such as service personnel in the Armed Forces. You might need to carry out care responsibilities for a relative that lives elsewhere, or perhaps you’re simply planning to go travelling for a few months.
Whilst you’re waiting for your home to sell
If you begin living with a partner and both of you own homes, it’s likely one of you will decide to sell up to cut costs. A consent to let can allow you to rent out your home temporarily whilst you wait for it to sell.
If you find your new ideal home, before you’ve sold your existing property it can be tough. A consent to let would let you potentially cover your old mortgage with rental income while you await sale - allowing you to snap up that dream home before somebody else does. A Let to Buy agreement could also help you to achieve this, however.
Waiting for a buy-to-let mortgage to go through
If you’ve already decided to become a landlord and are switching your mortgage to a Buy to Let, a consent to let can get tenants into your property sooner. This way you'll legally be able to let out the property whilst you await completion of the new mortgage.
Waiting out a fixed-term mortgage
Whether you’re planning to become a landlord or simply in a rush to leave, but are locked into a fixed-term residential mortgage, a consent to let could keep your mortgage paid through rental, until you’re able to remortgage without paying ERCs (early repayment charges).
Are you eligible for a consent to let?
Each lender has their own criteria, but most are fairly flexible when it comes to authorising a consent to let. Typically, you may need to meet some or all of the following criteria:
To have been with your current lender for a minimum term, usually 6-12 months
Not to have any mortgage arrears or late payments
To have an acceptable tenancy agreement in place - Assured Shorthold Tenancy in England and Wales, Private Residential Tenancy in Scotland, and Uncontrolled Tenancy in Northern Ireland
You may have to comply with a maximum occupancy, and will usually only be able to offer your home on a single tenancy basis
You'll usually need to inform/obtain approval from your insurance provider
You may need a minimum level of equity (around 25%) in your home, although the percentage varies by lender
Some lenders require you to have a minimum income level
There is usually a maximum length of term for a consent to let. This varies but usually ranges between 6-24 months, depending on the lender and your need
What about Airbnb?
Some lenders, for example, Barclays, won’t need you to apply for a consent to let if you’re only planning to let your property through Airbnb or similar services. This is typically allowed so long as your home isn't occupied by someone other than you for longer than 30 consecutive days or more than 90 days in total in any calendar year.
Other criteria varies by lender so it’s important to do your research. Certain local authorities may also require you to hold a licence in order to offer this type of let.
How do you get a consent to let?
Many lenders allow you to apply for consent to let online, or download an application form to complete and return to them. You could also request a form in person or over the phone. It’s a good idea to apply around a month before you plan to let out your property, as this will allow for processing time.
On the application you'll need to detail why you need the consent to let and how long for. You may also need to supply proof of your intention, for example, travel documents, a contract of employment or deployment, or a decision in principle for your new home.
How much does it cost to get a consent to let?
You'll usually only pay a fee if your application is accepted, but this varies by lender. Some charge a flat application fee of approximately £75-£300, however, others may opt to increase your interest rate whilst the agreement is in place. In some cases they will apply both a fee and an interest rate increase.
If you need to apply for consent to let multiple times, for example, if your work involves regular travel, then fees apply each time - although they don't generally apply to members of the Armed Forces.
It's also important to consider the costs involved with becoming a landlord, such as landlord's insurance, regulatory safety certificates, letting/advertising fees and maintenance of the property.
Can you let your property without a consent to let?
Not really, no. This would be an incredibly risky move, as doing so without your lender’s consent is highly likely to breach the terms of your residential mortgage agreement. This will be seen as mortgage fraud, and as well as putting your current home at risk of repossession, it can also make it more difficult to obtain a mortgage in the future.
Repossession is generally a last resort outcome, however, most lenders will increase your interest rate and may backdate fees that you owe at this increased rate. This type of charge is usually due immediately.
Advantages of consent to let
Ability to cover the mortgage repayments whilst you travel, sell or otherwise change your temporary living arrangements
The opportunity to trial being a landlord to see if it’s the right long-term move for you, before making any commitments with your mortgage
If you have tenants lined up, it’s quicker than remortgaging onto a Buy to Let deal
It can help you avoid ERCs (early repayment charges) if you want to move now, but can’t remortgage or sell your home before the end of a fixed term deal
Disadvantages of consent to let
Being unable to place or keep a tenant in your property
You will still be responsible for any repairs and maintenance required whilst the tenant is present
There is usually a fee to pay to arrange consent to let
You will need to comply with certain letting standards, such as safety regulations and providing basic amenities, which is likely to involve additional costs
Tenants won’t necessarily treat your home with the care and respect that you would
