Consent To Let

If you have a residential mortgage and want to rent out your home for a short period of time, you’ll need a consent to let agreement from your mortgage provider.

Here’s what you need to know about consent to let.

If you have a residential mortgage and want to rent out your home for a short period of time, you’ll need a consent to let agreement from your mortgage provider.

Here’s what you need to know about consent to let.

Mark Gordon
From the Mortgages team
4
minute read
Do you know someone who could benefit from this article?
Posted 7 MAY 2021

Can I rent out my house on a normal mortgage?

When you take out a normal, residential mortgage to buy a home, there’s usually a clause in the agreement stating that you can’t rent out the property. That’s because a residential mortgage is for homeowners who intend to use the property as their main residence.

Renting out a property long-term means using it for commercial purposes – in other words, you want to earn money from it. In this case, you’d need a buy-to-let mortgage.

However, if you only want to rent your home for a short period of time, you can ask your mortgage provider for consent to let.

It’s absolutely vital to get your lender’s permission before you consider letting out your home. Without their go ahead, you’ll be in breach of your mortgage contract. This could be considered mortgage fraud and you might end up in pretty hot water legally. Your provider could also demand that you repay the entire mortgage immediately and could even repossess your home.

Consent to let is the only legal way you can rent out your house on a residential mortgage. But it comes with a few conditions.

What is consent to let?

Consent to let is a formal, written agreement between you and your mortgage lender, giving you permission to rent out your home – or part of your home – for a short period of time. It’s the only way you can legally let your home without switching to a buy-to-let mortgage.

Consent to let allows you to change the conditions of your residential mortgage agreement for a short period of time. Not all lenders offer this and those that do normally only give permission for a certain length of time, typically six to 12 months, but in some cases up to 24 months.

It’s important to know that consent to let is only intended to be short term. It’s not a permanent change to your mortgage agreement and it’s definitely not a long-term letting solution.

If you intend to rent out your property for a longer period of time, you can apply for consent to let while converting your home loan to a buy-to-let mortgage.

When might I need consent to let?

There’s a few reasons why you might need consent to let. Usually, in these circumstances, lenders are happy to help:

  • You need to temporarily move for work or have accepted a short-term work contract overseas.
  • You’re moving in with a partner and want to rent out your existing home while waiting to sell it.
  • You’re going travelling for a few months.
  • You’re moving in with a relative who needs care.
  • You’re a member of the armed forces and have a tour of duty in another country.

Am I eligible for consent to let?

When you apply for consent to let, it’s not guaranteed that permission will be granted. There’s usually a few conditions that you’ll need to meet. For example, your mortgage lender might insist on the following:

  • Your mortgage payments need to be up to date and paid on time with no arrears.
  • You must agree to rent out your property on an assured shorthold tenancy.
  • You can only rent out your property on one tenancy agreement.
  • You can’t apply to borrow more on the property while it’s being rented out.
  • You must tell your home insurance provider about the new mortgage arrangement as it could affect your cover.

There might be other conditions as well, depending on the lender. For example:

  • You might only be able to apply for consent to let if you’ve held a mortgage with them for at least six months.
  • No multiple tenancies, and a maximum number of tenants on one agreement – for example, up to five people.
  • You might need a certain level of equity in your home – for example, at least 25%.
  • You might need to meet a minimum income threshold.

Can I get consent to let on a Help to Buy mortgage?

It’s highly unlikely you’ll get permission to sublet a property on a Help to Buy mortgage. One of the clauses under the Government’s Help to Buy Equity Loan Scheme is that you’re not allowed to rent out your property.

If you want to sublet, you’ll need to pay back the Help to Buy equity loan first. The only possible exceptions are members of the Armed Forces who are away from home on a tour of duty. In exceptional circumstances like these, permission to sublet may be considered.

Can I rent my property to family?

It can depend on the lender. Some mortgage providers won’t give consent to let for family and you may need to apply for a specialist family buy-to-let mortgage.

What happens if I let my property without consent to let?

If you let your property without your lender’s consent, you’re essentially breaking the law. If your mortgage provider finds out, at the very least they could charge you a penalty and raise your mortgage rates. It will also be much harder to remortgage as you’ll damage your credit rating by violating your mortgage agreement.

However, your mortgage lender could take further measures and demand you pay back your mortgage loan immediately. If you’re unable to, they could repossess your home.

In short, it’s not worth the risk.

Your home may be repossessed if you don’t keep up repayments on your mortgage.

What are the costs of consent to let?

Consent to let is by no means cost-free. There’s a number of extra expenses that you’ll need to factor in before renting out your home.

Lenders will usually charge you an extra percentage rate on top of your normal mortgage rate, or a one-off fee. Some lenders charge both.

There are also additional costs to consider when you become a landlord, even for a short period of time. These can include:

Consent to let: pros and cons

Advantages:

  • Gives you the time to move home without having the burden of two mortgages to pay.
  • Can provide a rental income while you’re away travelling or working.
  • Gives you peace of mind that your mortgage payments will be covered.
  • A good way of ‘trying out’ renting without having to fully commit to a buy-to-let mortgage.
  • It’s a lot quicker and more straightforward than having to remortgage.

Disadvantages:

  • If you can’t find tenants, you’ll still have to cover your mortgage repayments.
  • Associated costs can be expensive and may outweigh any profits you might make from rental income.
  • You’ll have the extra responsibilities that come with being a landlord.

What happens when the consent to let period ends?

When the agreed lease permission period ends, the conditions of your residential mortgage will go back to the same as before.

If you want to continue renting out your property, your lender might be prepared to extend the consent to let or they may offer to convert your existing mortgage to a buy-to-let one.

This doesn’t mean you have to accept your lender’s offer. If you decide to switch to a buy-to-let mortgage, you might want to shop around and compare what’s out there to see if you can get a better deal.

Looking for a mortgage?

Compare mortgages in minutes to see if you can save

Compare now
Compare mortgages in minutes to see if you can save Start comparing