Following a move by Nat West Bank last month, The Co-operative Bank has now decided to follow suit and remove its restrictions on its landlord mortgage borrowing. The traditional terms and conditions in UK buy-to-let mortgages previously prevented landlords from letting to tenants who were claiming housing benefit.
The restrictions also usually meant that landlord borrowers’ assured shorthold tenancies (ASTs) must be restricted to a maximum of a six-month term.
From the 1st of April the Co-operative Bank across all its lending brands will no longer expect landlords to follow its previous terms, although it said that the old wording will remain in some documentation until a final system update on 19 May.
Co-operative Bank managing director Gordon Soutar had said:
“We are glad to be able to remove this condition to the benefit of our landlords and prospective tenants who previously may have been restricted from taking up tenancy due to the inclusion of this letting condition in our mortgage terms and conditions.
“Our charity partner Centrepoint have raised this issue and the potential impact that this condition of let could have on the young people they work with.
“This is not a condition that we want to continue to include in the mortgages that we offer, and we will no longer enforce these clauses in our mortgage terms and conditions.”
It is now expected that more banks and mortgage lenders will now fall into line with the less restrictive terms. This is in the light of new government policy, which is for landlords to offer longer tenancies and to not discriminate against benefit claimants.©LandlordZONE® – legal content applies primarily to England and is not a definitive statement of the law, always seek professional advice.