Accidental landlords – Do you have consent to let your property?
Becoming an “accidental landlord” is more common than many people think. For example there are many life events that could make you an accidental landlord such as:
- Inheriting a home
- Acquiring a property ‘accidentally’ such as by moving in with a partner
- Relocating for work, whether this is within the UK or abroad
- Finding it difficult to sell an old property
While ‘renting out’ an additional property may seem like a good idea, and can be a fruitful venture, it is important to consider a number of factors which could influence your decision to do so. While you may not see yourself as a ‘traditional landlord’, who purchased a property with the view of letting it out, your circumstances now make you an ‘accidental landlord’ and you are therefore bound by the same rules, regulations and legislation that apply within the industry.
What should you do if you find yourself as an “accidental landlord?”
Contact your mortgage lender
It is very important to contact your mortgage lender as soon as possible if you are considering letting out your property. When a property is bought with the intention of letting it out you are required to obtain a buy-to-let mortgage from the outset.
These mortgages have different lending criteria, including items such as ‘coverage’, in which it is identified whether your rental income has the ability to pay the mortgage.
In a case where you may have become an “accidental” landlord the property which you are considering letting may have a residential mortgage in place. Letting this property straight away could violate the terms of your current residential mortgage agreement.
Violation of the terms of your mortgage agreement can lead to a penalty being imposed by your lender; in some instances this could mean that the full loan amount is called in.
It is therefore important for anyone considering letting out their property to ensure that they have the correct mortgage in place and discuss their options with their lender. Which? report that there are “accidental landlord” buy-to-let mortgages available on the market which can help in the event that you suddenly become a landlord and need to let your property.
You should always seek advice from your mortgage lender before making any changes to the nature of your property.
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Do you have consent to let?
Re-mortgaging your property may not always be the best option for you and in certain circumstances you may be able to ask your lender to provide what is known as ‘consent to let’. This means that you are able to let out the property dependent on certain criteria, for example this is often only allowed for a limited period of time or you may have to pay an additional percentage on top of your existing mortgage.
Lenders will likely want to establish the circumstances surrounding the letting of your property and may only allow you to do so if it is clear that you have no plans to rent it when you first purchased it.
Find out more about consent to let at Which?