The Telegraph have run an article about the danger of letting a property on a standard residential mortgage.
It can be seen here (subscription may be required) and points out that ‘failing to notify your bank about letting a property out may seem like a small inaccuracy, but lying to a lender for financial gain is a breach of contract. This constitutes mortgage fraud, which is a criminal offence.
In reality the chances of being prosecuted for mortgage fraud of this sort are small, but lenders are not willing to turn a blind eye and the repercussions could be financially ruinous.’
It goes on to say ‘If your stint as a landlord is likely to be a short one, asking your lender for consent to let could be the best option. Permission in writing is the only way to let out a property while staying on a residential mortgage.
Many banks and building societies will consent to let on a short-term basis, typically two years, said Ray Boulger, of mortgage broker John Charcol.’