Santander is dropping the rent rise clause but only for new mortgages

Readers Question - Published on 17/02/2017
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I’ve been campaigning for Santander to drop this ridiculous clause which forces up rents every year for no benefit to anyone, including Santander. They have announced today that they will be dropping this clause for new mortgages but it will still apply to existing mortgages.Santander

Santander’s disingenuous response states “Any potential to increase the rent is only that which can be ‘reasonably achieved’. Therefore we feel there is plenty of discretion for the landlord to set a rent that they and the tenant agree, and NO DIRECT OBLIGATION IMPOSED by us that the rent should be the maximum possible.”

The clause in the mortgage contract states:

“c) If the valuer advises that the market rent at the date of the review is likely to be higher than the current rent, YOU WILL PROMPTLY TAKE ALL STEPS which it is open to you to take under the lease to ensure that the review takes place AND LEADS TO THE MAXIMUM INCREASE IN THE RENT which can reasonably be achieved;”

To my mind, this categorically states that the landlord has an obligation to raise the rent every year. In addition, they don’t mention that we still need to pay £300/£400 EVERY YEAR for a RICS valuer, which we can then supposedly ignore, according to them. This makes no sense to me. What do you think? cmpid=msmorning_3111518&utm_medium=email&utm_source=newsletter&utm_campaign=ms_morning

Also see

Santander BTL contract clause stipulates Landlords increase rents by as much as can be reasonably achieved

Many thanks




  • Member of The Landlords Union - Click Here for Details

    Hi Heather,

    When I saw the first story I thought this was very unusual and an oddly worded clause.

    As a customer/borrower of Santander can you tell the rest of us how this actually works in practice every year.

  • Hi Neil,
    This is our first BTL so I read the contract carefully and was really surprised by the clause. We’ve only just got our first tenants in and I’ve included a clause in our AST that there will be a Rent Review at the end of the 12 month AST but I am hoping that we won’t be forced into getting a RICS valuer in and upping the rent. I’m planning to write to Santander to see if they will waive this clause on existing mortgages, especially as by their own words, there is no direct obligation to do this and it’s never been invoked. (Many people I’ve spoken to have said they haven’t read their T&Cs at all, so I don’t know if this clause is in any other lenders’ contract).

    The whole clause reads:
    “a) …a reasonable time before any opportunity arises for a review of the rent payable under the lease, you will get written advice from a qualified valuer who is a member of the Rics whether the market rent at the date of the review is likely to be higher than the rent currently payable under the lease;
    b) You will provide us with a copy of the valuer’s advice;
    c) If the valuer advises that the market rent at the date of the review is likely to be higher than the current rent, you will promptly take all steps which it is open to you to take under the lease to ensure that the review takes place and leads to the maximum increase in the rent which can reasonably be achieved;
    d) You will notify us promptly of the result of the review.”

  • Heather,
    I think the clause is open to interpretation and without knowing how this fits in with your lease, and lease period, it is difficult to strictly interpret.I can see that it is logical where commercial properties have formal review periods say every 5 or 10 years ….
    If on purchase you have obtained a valuers view of the rent (usually lower than you can achieve in practice in my experience) I can understand that the next opportunity may be at the end of the first lease (which might be 6 months) but I think if your agent (or you if you have done the necessary research) can say that the market is little changed, I cannot see that Santander would require (or could reasonably justify) the interpretation that you are seeing. (It would probably be judged as an unreasonable clause) However if the time period were 5 years I can see Santander’s rationale.

    What does your solicitor say? and what does Santander say when you have raised these sorts of extreme examples?



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