Mortgage provider changing their mind on allowing us to let our property - can they do that legally?

[Boobz]

Hi there - any advice gratefully received!

Will try to keep short. We are moving to Africa from Aug 21st and want to let our house whilst we're away to cover the mortgage (and it will do just that - cover it, not make a profit).

I enquired as to whether this was possible back on May 28th, as advised by my letting agent, and the person on the phone said "Yes, no problem, I'll make a note on your account and you must pay a £95 admin fee". I agreed to this, it was taken the next month on top of my normal mortgage payment and I thought that was the end of that.

I then wrote to the provider (Alliance and Leicester) on Wednesday last week to notify them of the change of address. I received a letter on Friday saying:

"As you are no longer living at the property address, would you please complete the attached declaration to let us know the reason for the change and what arrangements have been made to the property. Under the terms of your mortgage and in accordance with PlusMortgage lending policy, you are not permitted to let the property. As such, any application for letting consent with neither be considered nor approved by us".

We have already found a tenant to move in as soon as we leave, and need the rental income from the tenant to cover our mortgage whilst we are away (approx 2 years). They have left us almost no time now to try and sort out this problem.

I spoke to a customer complaints person on Saturday who said she would reprimand the person who made the mistake on the phone on May 28th for saying we could make this change to our account, but other than that, it does not change the fact our current policy does not allow us to let the house, and therefore we will either have to pay off a significant chunk of the mortgage to move it onto a policy that will allow us to let the house (costing us £16k - we don't have this), or pay back the whole mortgage amount and remortgage with another provider (we don't have time to do this) and pay an early redemption charge (4% of the policy, or £13k - we don't have this either). I said I wanted to speak to someone higher up - she said she would call back today with a phone number and name (still waiting).

Neither of these scenarios are workable to us. I spoke to my mortgage broker for advise and he said that I should threaten to take them to the financial ombudsman and that this usually makes them back down. If that doesn't work, he said I should just tell them that we're not going to let the property, but let it anyway - they would never find out unless we defaulted on the mortgage (which we won't if it's tenanted).

My friend who works in PR says I should write to various people at the Times / Guardian who name and shame these kind of stories, and see if that makes them back down.

So my legal / advice questions are:

1. When they said yes on the phone (no paperwork was sent unfortunately) and took the £95, did this become a legal contract and thus they now have to honour what they said they were going to do?
2. If I were to take the approach of saying it's not going to be let but then let it anyway, could they repossess the house if we were found out? Also, would this invalidate our house and contents insurances?
3. Would you go to the papers if you didn't get anywhere with threatening the ombudsman?

This is a total nightmare - I have been on my own for 7 weeks with a newborn and 16 month old (DH already in Africa) and have had to sort out a whole life changing move on top of looking after them, and now this? With 10 or so days to go?! I am frantic.

Any advice gratefully received!

I can't help much, but on your point 2) you really need to get tenants insurance for your house and your fixtures and fittings. With tenant getting their own contents insurance. You can't use your normal insurance. We got ours through direct line, iirc it's not much more expensive than when we were living in the house ourselves.

Hope you are able to sort something out soon.

I think paying the £95 fee would eb sufficient to secure the arrangement but you'd need to check t and c's as to whether they can renege on that.

I have changed insurance policies to cover tenants... it's just the mortgage that is the problem so far...

From what you say they haven't even offered to return the admin fee. As far as I can see they have entered into a contract for a consideration (the admin fee) and are now attempting to renege on that contract. To get out of it they would, at the very least, have to return the fee with interest and appropriate compensation. Simply saying they are going to reprimand the person doesn't cut it.

Personally I wouldn't tell them I wasn't going to let the house and then let it. That puts you in breach of contract and could cause problems if anything goes wrong.

I would threaten to refer the matter to the financial ombudsman. If they refused to back down I would go ahead with the referral. I would also talk to the press.

I would threaten the ombudsman, I would also go to the press.

They took the fee and I would class that as them agreeing to vary the terms.

Hi all - update here. After hundreds of calls, I finally got through to someone who could make a decision, and after deciding the nicey nicey approach would work better, rather than being arsey arsey, I spent over an hour putting forward our case, and they finally have agreed to let us let the properyt for one year, but then have to pay the £16k unsecured loan (part of our mortgage) so we can move onto the correct policy.

So we have to save just over a k a month between now and then (hard, but hopefully do-able) and I can let my property legally from the 21st as planned.

Yee-haw.

Thanks for all your advice - am glad it didn't come to ombudsmen, papers and tears, but your support was fantastic.

glad it has worked out