A guide to consent to let
Estimated reading time: 4 minutes.
If someone wants to let out their property while they have a residential mortgage, perhaps in an emergency, they will need to apply for what is known as a consent-to-let. It’s important to not confuse this with a buy-to-let mortgage, as they have key differences.
To let out a property while it’s still tied to a residential mortgage would require the homeowner to contact their mortgage lender to discuss applying for permission to let out the property.
Below, we cover what a consent to let is, what you need to do to apply for consent, how long consent to let lasts, and whether there are any costs involved.
What is consent to let?
Firstly, let’s address exactly what consent to let is.
Consent to let is when a mortgage lender gives the homeowner permission to rent out their property while it’s on a residential mortgage.
The vast majority of properties that are let out are done so on a buy-to-let mortgage, but there may be times when it makes sense for a homeowner who has been previously living in the property to apply for consent so that they can move out and let the property out to tenants instead.
As well as their mortgage lender, the homeowner may also need to gain permission from:
- A housing association or other connected organisation with regulations that apply to the property (for example: shared ownership)
- Other adults who has been living in the property and who may have occupancy rights
- The insurance provider to ensure the correct cover is in place while the property is let
Read: Securing the best return for your rental property
How long does a consent to let last?
Be aware that consent to let isn’t a long-term solution to letting out a property. Most mortgage lenders who agree to the request for consent usually do so for a period of time.
This is typically until the end of the existing fixed term, or for a year or two at a time, before reviewing whether they are willing to allow permission to continue.
How much does consent to let cost?
In return for granting consent to let, homeowners can expect most lenders to charge a fee for the switch and/or add a small increase to the interest rate on their current residential mortgage. In some cases, neither may apply, though that is rare.
Why is consent to let required before renting out a property?
The mortgage conditions of a residential mortgage will stipulate that the property is to be occupied by the homeowners. Therefore, in order for the homeowners to let out the property while remaining on the residential mortgage, they will need to seek permission from the lenders.
Moving out of the property and letting it out to tenants will be a breach of contract, which can result in financial penalties, or even the lenders calling in the entire loan which could force a sale if the homeowners are unable to pay the outstanding balance.
If you have a residential mortgage and would like to let out the property, you have two options. You can either apply for consent to let on your current residential mortgage - which isn’t a guarantee to be accepted - or switch to a buy-to-let mortgage.
Read: Future-proof your lettings property
How soon should I apply for a consent to let?
Homeowners should apply for consent to let as soon as they decide they would like to rent out the property. Contact your mortgage lender and they will tell you what you need to do to begin the consent to let application process.
When might it make sense to get a consent to let?
Some situations may call for consent to let. It may be a good choice when:
- You have a residential mortgage on a fixed term but would like to vacate the property and let it out. You could request for a consent to let to run until the end of the fixed term, and then switch to a buy-to-let mortgage.
- If you plan to temporarily move away, but then return, you could request for consent to let so that you can rent the property out while you’re not living there. This will allow you to earn some extra income to cover the mortgage payments while you’re away, while still having the property in a position for you to seamlessly move back in on your return.
- You want to sell the property for financial reasons but want to avoid early repayment charges from the lender while in a fixed term. You could request a consent to let to run until the fixed term ends so that you can temporarily rent out the property to cover the mortgage payments before selling at the end of the term.
Are you a new landlord who has recently gained consent to let and would now like to let out your property? If so, contact our dedicated lettings team here at CPS Homes and let us help you source the perfect tenants. With branches across Cardiff, we’re perfectly position to offer landlords expert advice and guidance. Contact us today by calling 02920 668585, e-mail enquiries@cpshomes.co.uk or pop in branch to see us.
The information contained within this article was correct at the date of publishing and is not guaranteed to remain correct in the present day.
