Mortgage lenders are targeting so-called ‘accidental landlords’ in a new swoop that could affect thousands.
Lenders are reportedly concerned that they have not been notified by many of those who have been forced into renting out their home. The rise of the accidental landlord has followed a period in which negative equity has meant that some homeowners are unable to sell their properties.
Mortgage providers believe that some of those individuals are renting out their property without permission, either in an attempt to avoid being forced to switch to a more expensive mortgage deal, or because they do not realise that they are required to do so.
But now lenders are reportedly using online letting services and the electoral register to identify properties that have been offered for rent. Those who are found to have done so without notifying the mortgage company could be found in breach of contract.
Buy to let mortgages are generally more expensive than residential loans as lenders consider them to represent a more substantial risk. In addition to higher repayments, lenders may also charge an administration fee to switch deals.
Letting a property without permission may also invalidate home insurance policies. Prospective landlords have been warned that they should confer with their insurance company before proceeding.