Can I Rent My House Out On A Residential “Normal” Mortgage?

No. Renting out your house without informing your mortgage lender is a breach of your mortgage terms. Most residential mortgages include a clause that requires you to live in the property as your primary residence. If you let it out without permission, your lender could demand immediate repayment of the full loan, charge penalty fees, or even begin repossession proceedings.

It may also invalidate your home insurance. The correct route is to apply for consent to let or switch to a buy-to-let mortgage before taking on tenants. If you’re considering letting your property in central London, Kubie Gold can advise on the steps to take before approaching your lender.

Consent to let is typically granted for a fixed period, most commonly 12 months, although some lenders allow up to 24 months. At the end of the agreed period, you’ll usually need to either reapply for an extension, return to living in the property, or remortgage onto a buy-to-let product.

Each lender sets its own terms, so the duration can vary. It’s worth checking your lender’s specific policy early, particularly if you’re planning a longer-term let in a high-demand area like central London where rental income potential may justify a full buy-to-let switch.

The cost of consent to let varies by lender but typically involves a one-off administration fee ranging from £0 to around £250. Some lenders also increase your mortgage interest rate by a small margin – often between 0.5% and 1% above your current rate – for the duration of the consent period.

There’s no standard charge across the industry, so it’s important to ask your lender directly. In some cases, particularly where only a short letting period is needed, consent to let can be significantly cheaper than remortgaging onto a buy-to-let product, making it a cost-effective option for London homeowners exploring the rental market.

Consent to let is temporary permission from your existing residential mortgage lender to rent out your home, usually for up to 12 months. Your mortgage stays on its current terms, sometimes with a small rate increase or fee. A buy-to-let mortgage, by contrast, is a product specifically designed for properties you intend to let out on an ongoing basis.

Buy-to-let mortgages typically require a larger deposit (usually 25%), charge higher interest rates, and assess affordability based on projected rental income rather than personal earnings. If you’re only letting temporarily, for example, due to a work relocation, consent to let is usually the simpler and cheaper route.

For landlords planning to let a property long-term in central London, a buy-to-let mortgage is generally the more appropriate product.

Yes, first-time buyers can rent out their property, but not immediately and not without lender approval. Most residential mortgages, including those taken out with first-time buyer incentives or Help to Buy, require you to live in the property as your main home for a minimum period, often at least 12 months. After that, you may be able to apply for consent to let.

However, if you purchased using a government-backed scheme, there may be additional restrictions on letting. It’s essential to check both your mortgage terms and any scheme conditions before proceeding. First-time buyers in London who are considering renting out their property should seek professional advice to avoid breaching their mortgage terms.

If you rent out your house without your mortgage lender’s permission, you’re in breach of your mortgage contract. The consequences can be serious. Your lender could demand full and immediate repayment of the outstanding mortgage, a step known as calling in the loan. They may also charge higher interest rates retrospectively, add penalty fees, or, in the worst case, begin repossession proceedings.

Your home insurance is also likely to be void, meaning you’d have no cover for damage, liability claims, or loss of rent. Separately, if you fail to meet your legal obligations as a landlord, such as gas safety checks, deposit protection, and licensing requirements, you could face fines or prosecution. In London boroughs where licensing schemes are in force, the penalties for unlicensed letting can be substantial.

Yes. Standard home insurance policies are designed for owner-occupiers and typically won’t cover you once tenants move in. When you receive consent to let, you should switch to a landlord insurance policy or, at minimum, notify your insurer and extend your cover.

Landlord insurance typically includes buildings cover, landlord liability protection, and optional extras such as loss of rent, legal expenses, and contents cover for any furnishings you provide. Some lenders make landlord insurance a condition of granting consent to let.

Given the value of properties in central London and the potential costs of tenant-related claims, adequate landlord insurance is strongly recommended.

Most buy-to-let mortgage lenders require the expected rental income to cover at least 125% of the monthly mortgage payment, and some require up to 145%, particularly for higher-rate taxpayers.
This is known as the interest coverage ratio or rental stress test.

For example, if your monthly mortgage interest payment would be £1,000, the lender would typically want to see projected rental income of at least £1,250 per month. Lenders usually base this calculation on a stressed interest rate, often around 5% to 5.5%, rather than the actual rate you’ll pay.

In central London, where rental yields can be lower relative to property values, meeting this threshold can be more challenging, so it’s worth running the numbers carefully before applying.

It’s unlikely but not impossible. Most lenders will be reluctant to grant consent to let if you’re behind on your mortgage payments, as it signals financial difficulty and increased risk.

However, some lenders may consider it if you can demonstrate that letting the property will help you clear the arrears – for example, if rental income would cover the mortgage payments while you live elsewhere at lower cost.

Each lender assesses applications individually, so it’s worth having an honest conversation with your provider. If consent to let is refused, you may need to explore other options such as negotiating a payment plan or seeking independent mortgage advice.

The exact requirements vary by lender, but when applying for consent to let you’ll typically need to provide your current mortgage account details, a completed consent to let application form (supplied by your lender), proof of your reason for letting (such as a job relocation letter or change of circumstances), and details of the proposed tenancy including expected rent and duration.

Some lenders also ask for an Energy Performance Certificate for the property and evidence that you have or will obtain landlord insurance. If you’re letting through an agent in central London, your managing agent – such as Kubie Gold – can help prepare the necessary documentation and ensure everything is in order before you submit your application.