Mortgage provider won’t allow Consent To Let

[WhatAMessAgain123]

Name changed as posted lately under relationships.

Long story which I won’t bore you with but my house isn’t selling so I think it might be wise to rent it out. I don’t live there so it is standing empty while I pay mortgage, council tax, utilities etc.

It’s on a resedential mortgage, but the provider won’t give me Consent To Let as I’ve owned it less than 6 months. The 6 months expires late February.

What are my options? Is the only choice to remortgage with a new provider on a Buy To Let mortgage? I’m guessing I’d have to then pay the new provider’s fees, plus the early redemption charge on existing mortgage?

Any advice would be appreciated. Thank you.

What did you intend to do with the house when you bought it?

Does that make a difference to her options now, @Twiglets1 ?

The plan was to separate from husband, but that plan changed after I completed (whole other story).

Are you locked into a mortgage product? If so you will incur fees if you remortgage even after six months.

Yes locked in for 2 years so I would definitely have to pay an early repayment charge.

So if you no longer need the house at all would it not be simpler just to continue trying to sell it? I believe lots of Lenders have this 6 month rule because it’s an unusual set of circumstances that would lead someone to buy a house on a normal residential mortgage then want to let it out before even 6 months have passed. Normally someone would have a special mortgage with a higher interest rate.

it’s really not a good time to be an amateur Landlord, from what I read and hear about. If the house isn’t selling then you may be better off reducing the price. Potential buyers may need an incentive to buy a property that is on the market so soon after purchase because they may suspect there are problems with it.

Then yes think you’re only options are to keep trying to sell, or pay the early redemption charge and try and get a buy to let mortgage.

Please don’t sleepwalk into being a landlord. There really is very little money in it and a whole heap of hassle and potential expensive headaches for you. At the very least make sure you have a slush fund of at least 6 months worth of whatever rent you would be charging, and a good tax accountant to do your returns. NB also a BTL mortgage will likely be on a higher rate.

Alternatively price the property keenly to sell and use any equity to invest in another way that I can guarantee will give you a higher return and allow you to sleep at night!!

Would letting out a few rooms on a lodging agreement still pay your mortgage? As long as you 'keep a room' for yourself and your paperwork still goes there, I don't think you are breaking any rules.

Thanks everyone - I feared this would be the case. It’s been on the market for 7 weeks with no viewings at all, even after I reduced the price. I’m paying for that mortgage, plus where I’m living at the moment so funds are tight for me. Probably a bad time of year to sell.

@Sensibleandboring that’s sounds interesting. Hadnt actually thought of that. I will look into that. Thank you.

Is there no way you can move into it while you are trying to sell it? Will keep the house looking and feeling nice and warm. And reduce your outgoings if you’re only paying one lot of mortgage/rent.
It is a bad time of year to sell but 7 weeks with no viewings at all tells you the price has to be reduced.

A house being on the market 3 months after the last sale will set off alarm bells for a lot of potential buyers. They'll assume there's something wrong with it.

@wutheringkites that’s why I thought renting it out for 6-12 months might be wise. Think I’m screwed either way unfortunately

I would raise a complaint with the lender and say they're not responding to your individual circumstances as they're applying a computer says no approach, and you're not getting a good outcome as a result. Definitely escalate it to someone with authority

Wrong!! The landlord actually has to live in the property for other occupants to be classed as lodgers. If they “keep a room” but are not actually resident then the occupants will be most likely deemed tenants and if the owner has not complied with the myriad regulations governing landlords then they will find evicting them extremely difficult and expensive. Not to mention that in some local authority areas this type of set up would be an HMO and therefore require a license - failure to get one will result in a large fine

@hockeysticks89 it really did feel like they were saying “computer says no” when I rang up. I’m going to escalate tomorrow!!

I think taking a lodger or two may well be the best solution. You will need to keep a room, and stay there occasionally.

You could encounter all sorts of issues if you rent on a tenancy agreement.

Staying “occasionally ” may not be enough to prevent a tenancy being implied (as opposed to a Licence to occupy which is what a lodger has). It is very bad advice in any scenario outwith the owner actually living there permanently and renting out spare rooms

@VanCleefArpels Why would she need to evict them? There's a massive housing crisis. Lodgers will most likely be grateful for somewhere to live, pay their rent and help @WhatAMessAgain123 out of an annoying loss making scenario

Just price it correctly and it will sell. Do it quickly though because it will fall further in value next year - and possibly the year after too.
I imagine if you completed in July, on a value from early this year, your going to have to take a significant hit I'm afraid.

Seconded.

the mortgage company will offer you a different product at a higher rate, if they offer anything at all.

Just made some unpleasant decisions myself in order to avoid accidental landlording. People who think it's easy have had great experiences I guess.

Can’t you just keep doing what you’re doing now until February? It’s only a couple of months

If and when OP wants to take possession of the property again, if the occupants have tenancy rights she would have to potentially take court action to evict them. True Lodgers only have a Licence to occupy and can be asked to leave the property with far less process involved. I was making the point that a sham “lodger” arrangement as you suggested could result in the owner of the property being in a huge legal mess and therefore it is not advisable