Buy-to-let mortgage: When to inform your lender of changes

There are times when landlords need to let their mortgage lender know about any changes to a tenancy. Our mortgage expert Jeni Browne of Mortgages for Business throws some light on the matter in response to a question from a reader

The question…

My tenant has just announced they are moving out at the end of their agreement and I am looking for a new tenant. It’s a two bedroom flat and my current tenant is a single man.

I have had interest from a family – two adults and two children. I know this might seem like a silly question but do I need to inform my mortgage lender of this change of situation? I wondered if they might be concerned about additional wear and tear or the fact that a two bed flat might not be appropriate for a family.

Jeni says…

Not a silly question at all – we are all learning as we go!

So no, you would not need to let the lender know about this change as you will still be letting the property on a standard Assured Shorthold Tenancy (AST) agreement.

You would need to notify them if you were going to change the nature of the tenancy (ie let to multiple tenants on separate tenancies or perhaps letting to a company).

So you are right to ask the question, there are times when you would need to notify the lender, but this is not one of them.

Your comment around wear and tear is a valid one, but when lenders assess your mortgage, they look to ensure that you have a financial buffer (surplus rent after mortgage cost) which you can use to maintain the property and keep it in a good state of repair.

To see more of this month’s readers’ buy-to-let mortgage questions and Jeni’s expert advice, click here. If you have any questions you would like Jeni to answer email kate.saines@emap.com

Jeni Browne is sales director at Mortgages for Business