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Consent-to-let

The vast majority of standard residential mortgages are only set up to accommodate owner occupiers, so will typically have terms and conditions that prevent the homeowner from renting out the property whilst the mortgage is in place. As life is never as straightforward as a set of terms and conditions, however, there are a whole host of reasons that you may need to consider letting out your home for a short period of time, even if that wasn’t your intention at the time of purchase.
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How to become a buy to let landlord. Image of colourful houses with To Let boards.

Whereas you would need a Buy to Let mortgage to become a permanent residential landlord, a consent to let is a formal agreement that you make with your lender, allowing you to let out your home on a temporary basis, whilst still having a residential mortgage in place. 

This can be a helpful way to ensure your mortgage is paid when you need to live elsewhere for a set period of time, or a great way to test whether or not becoming a landlord is the right move for you, before you make a permanent commitment and switch your mortgage to a Buy to Let. 

Not all lenders offer this option, and it will depend on the type of residential mortgage you have, for example, those with certain home ownership mortgages, such as Help to Buy, usually won’t be able to take advantage of consent to let. 

Although the duration of consent to let agreements will vary by lender, and depending on your needs, it is very much a short-term solution, and is not intended for those planning to become a permanent landlord. 

There are a wide range of circumstances that may lead to you needing to temporarily let out your home. Here are some of the main circumstances that a mortgage lender may consider offering a consent to let agreement:

Temporary relocation

This could be as a result of work demands, and is particularly common for those who are regularly posted abroad, such as service personnel in the Armed Forces. You may also need to relocate to carry out care responsibilities for a relative, 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’re a home mover looking for your new ideal home, it can be very difficult if one comes along before you’ve sold your existing property. A consent to let could provide you with rental income whilst you await the sale of your current home, therefore allowing you to snap up that dream home before somebody else does. 

In this situation you may also consider a Let to Buy agreement, which would allow you to move home and retain your original home as an investment property. Not all lenders offer this option, but a Let to Buy agreement allows you to take out two mortgages simultaneously, one to remortgage your existing property onto a Buy to Let mortgage, whilst using the equity to secure the second, a new residential mortgage to buy your future home.  

Waiting for a buy-to-let mortgage to go through

If you’ve already decided to become a landlord and are in the process of switching your mortgage to a Buy to Let, a consent to let can help you get tenants into your property sooner. This way you will 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 will allow you to let out your property until you’re able to remortgage or sell it without paying ERCs (early repayment charges).

Each lender has their own criteria, so you’ll need to check what the specific requirements are, however, most are fairly flexible when it comes to authorising a consent to let. Typically, you may need to meet the following criteria:

  • Have been with your current lender for a minimum term, usually 6-12 months

  • Not have any mortgage arrears and have a timely payment record 

  • Have an acceptable tenancy agreement in place - this would be an assured shorthold tenancy in England and Wales, a private residential tenancy in Scotland, and an 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 will usually need to inform/obtain approval from your insurance provider

  • You may need to have a minimum level of equity of around 25% in your home, although the percentage will vary by lender

  • Some lenders will require you to have a minimum income level

  • There will typically be a maximum length of term that it’s possible to apply for a consent to let for. This will vary, but usually ranges between 6-24 months, depending on the lender and your need

What about Airbnb?

There are a number of lenders, for example, Barclays, who won’t need you to apply for a consent to let if you’re only planning to let your property on a very short term basis, such as for holiday lets, like those facilitated through Airbnb or similar services. 

This is typically allowed on the basis that your home is not occupied by someone other than you for longer than 30 consecutive days or more than a total of 90 days in any calendar year. 

Remaining eligibility criteria will vary from one lender to the next, so it’s important to do your research before you take this step. It’s also important to note that certain local authorities may require you to hold a licence in order to offer this type of 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 will need to detail why you need the consent to let and how long for. In some cases, 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. 

You will only usually need to pay a fee if your application is accepted, and this varies by lender. Some charge a flat application fee of approximately £150-£300, however, others may opt to increase your interest rate whilst the agreement is in place.

If you need to apply for consent to let multiple times, for example, if your work involves regular travel, then fees will be payable for each individual application. Fees do not generally apply to members of the Armed Forces, however.

Although most consent to let agreements are offered for a maximum of 24 months, it may be possible to pay an annual fee in order to maintain the agreement in the long term. This can save having to reapply multiple times if you have a job where travelling abroad for months at a time is the norm.  

Once the consent to let ends, what you do will depend on your circumstances at the time and why you took out the agreement in the first place. If you don’t take any action, however, and you continue to rent out your home after the agreement has lapsed, you will be in breach of your mortgage terms. 

It may be possible to extend the consent to let period in the short-term, however, if you’re planning to continue renting out your home, you will need to remortgage onto a Buy to Let mortgage. Bear in mind that you won’t necessarily need to do this with your existing lender, and be sure to compare remortgage Buy to Let deals across the market. 

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.

There are a range of benefits of using a consent to let agreement, however, which ones apply to you directly will depend on why you need one. They could be:

  • 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

As with any agreement, there are also drawbacks to taking a consent to let, which could include: 

  • 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

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