Buying a Second Property With Consent To Let On The First
Author: Pete Mugleston
CeMAP Mortgage Advisor, MD
The question is, ‘Can you buy a second property and get consent to let on the first?’ This is a complex issue, and several factors must be considered.
A property let out to tenants normally requires a buy-to-let mortgage, but you may be able to arrange ‘consent to let’.
What is consent to let?
If you approach your mortgage provider, some may agree to give you ‘consent to let’, allowing you to let your home. But be aware that it is considered a temporary measure, not a long-term agreement, usually between 6 to 12 months.
Their criteria for granting ‘consent to let’ could include you moving far away for employment (those in the military are often given ‘consent to let’ if they are sent away on an extended deployment). Some people may be getting married and moving into their partner’s home.
All lenders are different, so be aware that there may be fees to pay or additional interest incurred.
Can you live in the second property?
If you have a standard residential mortgage, then yes. If it’s a buy-to-let mortgage, then no.
If you can afford it, buying the second property with a residential mortgage and then converting the first property from residential to buy-to-let is a relatively simple process.
The downside is that you must prove to the mortgage provider that you can afford two mortgage payments. With a buy-to-let, the income generated by the rent is taken into account.
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Would you need to remortgage your first property?
Yes. Depending on who offers the best deal, this could be done through your existing mortgage provider or a new lender. The new mortgage would have to be a buy-to-let mortgage.
If you intend to rent the first property indefinitely, an interest-only mortgage might be an option. This will reduce repayments, but you will have to pay the principal at the end of the mortgage term.
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Do you need to tell your mortgage provider you intend to let out your property?
Yes! If your first home has a standard residential mortgage, you will breach the terms and conditions if you decide to let the property. The lender could terminate the mortgage and request full payment of the debt.
What other costs could be involved?
Apart from the usual solicitors’ fees and valuations, a rental property can incur costs including –
- Landlord insurance
- Agency letting fees
- Maintenance
- Gas safety certificate
- Energy performance certificate
- Smoke alarms
- Etc
As with any major financial decision, it is vital that you speak to an expert for the best advice to help you make the right decisions.
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Pete Mugleston
CeMAP Mortgage Advisor, MD
Pete, a CeMAP-qualified mortgage advisor and an expert in all things mortgages, cut his teeth right in the middle of the credit crunch. With plenty of people needing help and few mortgage providers lending, Pete successfully went the extra mile to find mortgages for people whom many others considered lost causes. The experience he gained and his love of helping people reach their goals led him to establish Online Mortgage Advisor, with one clear vision – to help as many customers as possible get the right advice, regardless of need or background.
Pete’s presence in the industry as the ‘go-to’ for specialist finance continues to grow, and he is regularly cited in and writes for both local and national press, as well as trade publications, with a regular column in Mortgage Introducer and being the exclusive mortgage expert for LOVEMoney. Pete also writes for Online Mortgage Advisor of course!
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