Whether you have a sudden job offer or you’re moving in with a partner, the need to relocate can happen overnight. Many homeowners, understandably, want to retain their property in these circumstances, but paying a mortgage and rent at the same time can be challenging.
The good news is, most lenders will allow you to rent out your home on a temporary basis using a consent to let agreement. We explain what this essential permission is, how to get it, and what to consider if you’ve found yourself an accidental landlord.
What is consent to let and how does it work?
Consent to let is an agreement between yourself and your mortgage lender, where they grant formal permission for you to rent out your home under your existing residential mortgage agreement, for a set period of time.
If you let out your home on a residential mortgage without this permission, you will be in violation of your mortgage terms. This means that the lender could demand that your mortgage is repaid in full, which can also impact your chances of securing a mortgage in the future.
While some lenders can be wary about consent to let, as tenants are seen as riskier than permanent residents, it’s usually only granted for a fixed term, on the agreement that you move back into the property or sell it at the end of this period. However, usually a set term of 1-2 years provides an adequate trial period for those wondering whether to become a permanent landlord.
What type of mortgage do you need for it?
The whole purpose of consent to let is to allow you to retain your original residential mortgage. Typically you would need a buy-to-let mortgage to let out a property, but if you have valid reasons for consent to let, then it saves you the hassle and additional costs of remortgaging to a buy-to-let deal straight away.
You might need to arrange for a consent to let for the following reasons;
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You're travelling or studying away from home for a fixed amount of time
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You're working in another part of the country on a temporary basis
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You are planning to move in with a partner, and you're not ready to sell your current home
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You’ve inherited another home but want to keep your original property
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Waiting for a buy-to-let mortgage to go through but want to get tenants into your property sooner
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You’re in the early stages of a fixed-term mortgage period and want to eventually let out your home. Using a consent to let until you are able to remortgage onto a buy-to-let without paying ERCs could save you a substantial amount
When to switch to buy-to-let
Consent to let agreements are intended to be short-term, so you’ll need to show that you intend to either move back to the property or sell it within the relatively short term future. Most consent to let agreements are offered for a maximum of 2 years, but it may be possible to extend the consent to let period with some lenders. This will usually involve paying an annual fee.
However, if your lender believes that renting out your home has become a more permanent arrangement, they will likely insist that you remortgage onto a buy-to-let mortgage. These are designed specifically to allow landlords to let out property for profit, so are more commercial in nature, and typically cost more than residential mortgages.
Steps to obtain consent to let
While most lenders offer a consent to let option, it’s a good idea to consider your longer term goals before you apply. Speaking to a mortgage broker with experience in this field may be helpful, as they may be able to give consent to let advice and provider recommendations to support accidental landlords.
Follow these steps if you’re looking for a stress free journey to securing consent to let:
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Speak to a mortgage broker for advice
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Look into your lenders terms and conditions for consent to let
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Ensure you have the relevant evidence to support your agreement, such as travel documents, a job offer or deployment, or proof of moving into another address
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Apply online or download a form from your lender to request a consent to let agreement. Most lenders have their own form for this, but you may have to request one in person in some instances
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Once consent to let is confirmed you can begin looking for a tenant
Get independent mortgage advice today
Which lenders allow consent to let?
Most lenders are fairly flexible when it comes to authorising a consent to let, as they understand that circumstances can change quickly. However, many have either an application fee and/or an annual fee for this. They may also have specific consent to let interest rates, meaning you would experience a temporary rate increase during the agreement.
To qualify for consent to let, each lender has their own specific criteria, but usually they will require that:
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You’ve lived at the property for a minimum of 6-12 months
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You are not in mortgage arrears
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You have a tenancy agreement in place
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You have sought approval from your home insurance provider
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You’ll typically only be allowed to let for a maximum term of around 24 months
In addition to the above lenders may have additional requirements related to the number or type of tenants you’re able to rent your home to. You may also need to have a minimum level of equity in your home.
This table highlights the fees payable for a consent to let agreement, as well as any interest rate increases and major policies that apply with some of the main UK mortgage lenders:
|
Lender |
Fees applicable |
Consent to let Policy |
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£120 application fee + £120 annual fee |
Must have held mortgage for 6+ months Consent granted in 12-month increments |
|
|
£295 one-off fee |
Requires 6 months of ownership (3 months if you recently switched deals) |
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0.50% interest rate increase |
Minimum 6 months ownership Usually granted for 12 months at a time |
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0.50% interest rate increase (waived if on SVR) |
Policy applies only for the duration of the let |
|
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Usually £0 for the first period but renewals may incur fees |
Granted for 18 months (max 2 times) No additional borrowing allowed while letting |
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|
Generally no fee or interest loading (increase) for temporary relocation/work but may apply for other circumstances |
Typically granted for up to 2 years Proof of relocation may be required |
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|
N/A |
Consent granted for up to 27 months Requires 6 months ownership |
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£85 admin fee Possible interest rate increase (typically 1%) depending on the specific product |
Fees only apply while the property is let |
|
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£100 admin fee 1.00% interest rate increase |
Fees only apply while the property is let |
|
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£60 application fee 1.00% interest rate increase |
Fees increase to 2% if letting is unauthorised |
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£40 fee 1.00% interest rate increase |
Usually reviewed annually |
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Woolwich Building Society |
£0 for most temporary relocations no interest increase for fixed terms |
Follows Barclays (now fully integrated) |
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0.50% interest rate increase |
Follows Halifax (part of Lloyds Banking Group) |
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£125 admin fee |
Maximum 80% LTV Property must meet ‘self-financing’ rental cover |
Thing to consider before you request consent
While a consent to let can be instrumental in keeping your home if you unexpectedly need to move away temporarily, it’s important to consider the full consequences of becoming an accidental landlord. Here are some important considerations:
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Insurance: You’ll likely need to change your home insurance policy to landlord insurance, but this is unlikely to be granted without consent to let
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Higher interest: Consent to let rates can be slightly higher than your typical residential mortgage rate. Some lenders increase the rate by 05%-1% - which is known as ‘interest loading’. However, this is usually still lower than buy-to-let rates
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Legal requirements: As a landlord you have more responsibilities to maintain your home to a certain standard, which will include attaining the relevant safety certificates and meeting minimum rental standards. The Renters' Rights Act also requires all landlords to register themselves and their property on a central government database to avoid heavy fines. Right to Rent Checks are also a legal requirement for all landlords in England, so you must check the immigration status of tenants
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Letting costs: You may need to employ a letting agent, depending on how challenging it would be to manage your own lettings from where you relocate to - this adds additional expense
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Tax implications: Landlords can no longer deduct mortgage interest from rental income before paying tax, so they receive a 20% tax credit. This can push some accidental landlords into a higher tax bracket. If you sell your home in the future, you may also owe capital gains tax for the period it was rented out
Get independent advice about consent to let
At Money Helpdesk, we can help you to secure a consent to let, or take the next step into becoming a permanent landlord with a buy to let mortgage. Whether you need advice on how to qualify or apply, or a quick comparison of all the lenders available to you, we’re experts in this field.
Simply get started here to speak to one of our knowledgeable advisers.
FAQs
No, consent to let is a temporary arrangement on your current residential mortgage, whereas buy-to-let mortgages are for permanent landlords. You may need to remortgage to a buy-to-let mortgage if you reapply for a consent to let multiple times.