Do I need my Building Societies permission to let my home?
I am thinking of renting out my home. Do I really have to inform my building society?
The short answer is, yes - for the simple reason that ordinary residential mortgage agreements invariably require it. Failure to do so would therefore put you in breach of the terms of your agreement. Technically, your lender would then be well within their rights to demand immediate, full repayment of the loan - although in practice they would be unlikely to do so, as long as your monthly payments are up to date.
This requirement is not new. However, back in the days before the recession, lenders were generally pretty relaxed about such things and were highly unlikely to refuse permission, unless you were in arrears.
Things are very different now. If you have a "good" reason to rent out your home - for example, if your job is relocating temporarily to another part of the country - then your lender will generally still give their consent, although they will probably require you to switch to a buy-to-let mortgage, or at the very least pay a higher interest rate. However, in the case of homeowners who are clearly stretched financially, and are only contemplating renting out their homes in a last-ditch attempt to hang onto them, there is a distinct possibility that the lender will refuse permission.
There's another side to this issue, which is that prospective tenants are increasingly asking to see documentary proof that landlords have been granted that permission. This is because, with the recent growth in the number of hard-pressed "amateur" landlords renting out their homes without the proper consents, tenants are becoming more and more aware of their own vulnerability. If the landlord subsequently defaults, for example, they can all too easily find themselves homeless, through no fault of their own. In fact, some prudent letting agents, alive to this possibility, have even started asking for several months' rent in advance, which is then kept in a client account in case it needs to be reimbursed.
So, all in all, I would strongly advise against renting without first getting your lender's blessing. Yes, it will cost you, but this is more than outweighed by the potential risks of not doing so - not least, the fact that failure to get the proper consent will probably invalidate your buildings insurance, just when you might need it most…!