Naive consent to let assumed but then refused

by Readers Question

9:29 AM, 8th February 2017
About 2 years ago

Naive consent to let assumed but then refused

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Naive consent to let assumed but then refused

Both myself and my partner decided the time was right to move in together in the summer, the decision was made that we would move into my property as it is in a more desirable area and fits into our plans for the future.mistake

She decided, instead of selling, to rent the property out, and keep it as a nest egg for retirement.

She contacted her mortgage company to enquire about consent to let, they advised once she had decided whether to rent or not, that she was required to put in writing a formal consent to let application.

We contacted a letting agent, and within 4 weeks of starting the ball rolling, we had a tenant.

She composed the letter and thought nothing more, no reply so assumed all was ok.

Move forward 6 months and she was aware her fixed rate product was due for renewal, she contacted the mortgage company to enquire about products and to confirm that consent to let was applied and if that would affect the product rate etc.

She was told that no consent to let had been given as using a previous valuation, there was not 20% equity in the property. (Non of this was mentioned previous). My partner got worried and told them we did NOT have a tenant, but would be doing so in the near future.

We challenged this change of tune, but did not want to rock the apple cart too much as it may cause us problems.

Next we looked into a consumer buy to let mortgages, however, with the lack of equity combined with earnings of sub £25k a year, there isn’t a suitable product.

The property has a rental income of £500 a month, and now she is on the SVR the repayment is still only £340, so it is making a good profit.

We want to make it all legitimate but feel that the door is being closed at every turn!

We admit we where naive for not looking into this before hand.. any advice would be Truly gratefully received.



Comments

Neil Patterson

9:38 AM, 8th February 2017
About 2 years ago

Hi Stuart,

This is a very common issue and often people don’t ask for consent until it is too late and are then at the mercy of the lenders decision.

Please see the many articles on this from article search on the left >> https://www.property118.com/?s=consent+to+let&submit=

Lenders all share information when a customer has mislead them so please immediately stop and tell the truth when you have to respond otherwise you will make life very difficult finding a solution going forwards.

However the good news is that if you can prove you applied for consent then they will likely take it easy on you as they are in the wrong for not responding and if you took it to the ombudsman they may be sympathetic 🙂

If the rental cover is enough then your earned income may not be an issue but you need a whole of market broker to do a full fact find and search.

If you want me to get one of our team to help just email me all your details to npatterson@property118.com

Richard U

10:10 AM, 8th February 2017
About 2 years ago

Interesting post. I applied for permission to let on my first property having rented rooms out, then decided to move-on. I spoke to the building society and they agreed verbally. I then heard nothing more, until 8 years later when I approached them to talk about remortgaging. They then informed me I didn't have permission to let. I explained I had let the house for many years and as I had provided tenancy agreements there was no way to quickly resolve the breach of mortgage agreement. They offered no solution and I left the issue with them. I heard no more...I'd be interested to know whether anyone has ever experienced action from their lender for being on the wrong mortgage? I know a number of people who used residential mortgages to fund buy to lets - including 1 who took a 100% mortgage! I have always tried to play by the book and have 25-30% deposits on other properties, clearly the returns doing this are nowhere near as attractive!

Stuart - i'd suggest that to play by the book you either need to sell, or find some money to put down to up your deposit. Your bank maybe amenable to some discussion - worth talking to them...

Paul Green

18:21 PM, 8th February 2017
About 2 years ago

Hi Stuart, some buy to let mortgage lenders don't have a minimum income criteria, like the Bank Of Ireland for instance ... also you could pay down a small chunk of the mortgage so the loan to value fits in with the buy to let lenders criteria ...


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