Consent to let or a buy-to-let mortgage? Letting your home

Scope: England and Wales. This is contract law and lender policy rather than housing legislation, so it does not diverge between the two — but the tenancy you grant does, and in Wales it will be an occupation contract. Not financial advice.

Most first-time landlords did not buy a rental property. They moved in with someone, took a job elsewhere, inherited a house, or could not sell. If that is you, there is a question to answer before any of the compliance sequence matters: are you permitted to let this property at all?

Two separate permissions, and people usually think of only one.

Permission one: your lender

A residential mortgage is priced on the assumption that you live there. Letting the property without telling the lender is a breach of the mortgage conditions, and lenders describe it plainly on their own websites.

Consent to let

Consent to let is the lender agreeing, in writing, that you may let the property while keeping your existing residential mortgage. It is typically:

• Time-limited — commonly six to twenty-four months, renewable at the lender's discretion.
• Conditional — often on the tenancy being an assured shorthold (England) with a fixed maximum term.
• Sometimes priced — either a fee, or an interest-rate loading, or neither.

It suits the genuinely temporary case: a two-year secondment, a house you are trying to sell.

A buy-to-let mortgage

A different product, underwritten on the rent the property will earn rather than on your salary. It usually requires a larger deposit and is priced higher. It suits the case where letting is the plan rather than the accident.

What happens if you do neither

The lender can, in principle, demand immediate repayment of the whole balance. In practice they more often move you to a higher rate and charge a fee retrospectively. Either way, the risk is not theoretical and it is entirely avoidable: the request is usually a form and a phone call.

Permission two: your lease

If the property is a flat, you almost certainly own it leasehold, and the lease may restrict letting. Restrictions come in three strengths:

• An absolute prohibition — no letting at all. Rare, but it exists.
• A qualified covenant — letting only with the freeholder's consent.
• A notification requirement — let freely, but tell the freeholder and usually pay a registration fee.

Read the lease before you advertise. A breach of covenant is enforceable against you by the freeholder, and unlike a lender's displeasure it can ultimately threaten the lease itself.

Insurance is a third thing, and it lapses quietly

A standard residential buildings and contents policy is written for an owner-occupier. Let the property and cover can be void from the moment the tenancy starts — not cancelled with a letter, simply not there when you claim. You need a landlord policy. See what landlord insurance actually covers.

The tax question is separate, and it is not small

Letting your former home changes your position on income tax and, eventually, on capital gains. Mortgage interest is no longer deductible in the way it once was — see the section 24 restriction — and the relief you get on a property that was once your home is time-limited. Read CGT on selling a rental before you assume the eventual sale is tax-free.

The order that saves trouble

1. Read the lease, if leasehold.
2. Ask the lender, in writing, and keep the reply.
3. Move the insurance to a landlord policy.
4. Then begin the compliance sequence.

All three of those are permissions. None of them is compliance, which is why compliance guides skip them and why so many accidental landlords are in breach of something before they have met a tenant.

Run the free compliance check once you have permission — it will tell you what applies to the property itself.