Permission from lender

Many investors have opted to purchase properties intended for rental using a standard residential mortgage rather than a mortgage specifically intended for buy-to-let properties. This is mortgage fraud. However if you have bought your own home using a standard residential mortgage and now wish to rent it out then this is usually allowed, you will just have to obtain permission from the lender. Failure to obtain this permission would break the terms of the mortgage agreement and the lender could theoretically insist on repayment of the full mortgage.

Almost all lenders will grant permission to rent out your home. In many instances the lender will give permission to rent the house out with no changes to the mortgage. Some lenders may charge an administration fee for granting permission and/or change you to a slightly different mortgage deal.

Occasionally the lender will refuse permission to rent the property out under the existing mortgage in which case the landlord must remortgage to a buy-to-let mortgage. However, refusal to allow you to rent the home out is very rare and is usually due to other factors such as serious mortgage arrears and imminent repossession.

Often permission to rent the property out is granted for a finite period such as 24 months, or until the end of any mortgage tie-in period. This tends to cover the situations where the house is being rented out for a finite period while the owner goes travelling before moving back into the house; and to avoid the need to pay early redemption fees on the mortgage. If the home is to be rented out long-term then the expectation is that you should remortgage to a buy-to-let mortgage at some point.