UK Landlord Forum / Life

Hi all,

Having spoken to my financial advisor, colleagues and friends, I'm a bit puzzled. I thought one of you wise owls may have come across this is in your time as a landlord.

I bought my first house back in October 14. For reasons I'd rather not go into, things didn't go as planned and after thinking about my options, I've decided to look at renting my house out.

So, I called my mortgage company, told them my situation and asked if it was possible to do this, given that I've not long bought the property.

I was told that because I'm yet to make 12 months payments, they would grant me "unauthorized permission to let". I questioned the lady as to what this meant. She said that its permission to let, but its unauthorized as its not something they would recommend because I'm yet to prove I can pay a years worth of mortgage payments.

Still perplexed, I asked more questions and she didn't really say anything other than this. I got the feeling she wasn't massively clued up, but she did answer everything.

Should I want to do it, they would bump my mortgage up by 1%, which is fair enough (though begrudged, obviously).

So, has anyone heard of such a thing? Seems a crazy use of terminology, but I don't care as long as I have legal permission to rent out my house.

I look forward to your comments...

Legal speak.

They are changing the contract, by increasing the rate, and you are changing it by letting it.

Document what happened as much as possible and do what you have got to do.

There is probably some clause in the small print which gives them additional rights, if the activity is not authorised.

When you have proper consent to let some lenders ignore this mortgage as though it is a BTL for the sake of you getting another mortgage.  Maybe, doing it this way it wouldn't be discounted when trying to get another mortgage.

This is pretty normal. YBS do the same kind of thing... if you start letting your property (they don't do BTL products) then you don't get impacted by that interest rate kicker if you have paid them £85 to get CTL. However, they can't really stop you from letting the property, but if they don't provide CTL or find out you're letting it in an unauthorised manner, then they'll add the kicker... usually 1%. Terminology might be a bit whack, but the idea is sound. I would not begrudge it actually... theoretically, a Lender (if they offered BTL products) could ask you to move to a BTL product and that would attract a higher interest rate. Letting out property on residential mortgages and doing that intentionally, as a plan, is mortgage fraud. You are nowhere near that, of course, so you are going about things in the right way - the facts still are a) you bought a property on a residential mortgage and b) you now want to let it out, without having lived in it (or at least not for a reasonable period).

As you say, you shouldn't really care as long as you have permission (even for an unauthorised let) from your Lender, that's the main thing here.

Cheers all.

As long as it's legal (I will check the paper work) and it means it won't invalidate any insurances or policies, then I'll continue the journey.