By Steve Roulstone
It was my misfortune to come across this very situation myself at the end of last year, when I rented my home out, not because I could not sell, but because I had an opportunity which made very good sense to me as a house owner. It seems to be the house owner piece of that statement that the mortgage companies are ignoring, for one aspect of my situation did not make sense any way that I look at the circumstances.
Confirmation I am not alone.
A recent report in Property drum (An excellent monthly magazine which I wholeheartedly endorse) confirms that this practise is still happening and for the same reasons! It seems that some mortgage companies are just taking the opportunity to make more money and others are just downright rejecting the possibility without giving the circumstances any consideration at all. It is the situation where the amount of risk to the mortgagor is low that gives me the most concern. In my case, I only owed at a most conservative valuation no more than 20% of the property value. In the reported case this figure was 30%.
Where’s the risk?
I am unable to confirm in the reported case, but in mine the return was twice the mortgage that I was due to pay at that time and yet the answer I received confirmed that it was not a matter of any circumstances fitting the bill, rather that they were unprepared to consider any rental situation at all. In the reported case it was that the owner (Look up the meaning of the word!) was charged 1% for the privilege, or take out a new buy to let Mortgage, which would of course result in more fees being paid. I can at least understand that, but why just say no, especially when we still had to go through the application system?
No understanding of the market?
It could just be that they do not understand what is happening out in the real world, or just that decisions have been made with no consideration to the market that they operate in, but isn’t that no better than giving mortgages and therefore money with such ease that was the cause of the problems we are living through in the first place? It does not sound right does it? But I would love some other explanation that did make sense because at present, the rental market is growing year on year, we have a shortage of housing for the number of Tenants approaching the market and for the first time in history, the private rental sector should overtake the public, this year.
No excuses that make sense.
The reasons listed above are not alone, indeed other reasons are given and can be found through a little research, but none of the reasons make sense to what is actually happening on the high street and in housing estates up and down the Country. This includes the statement that mortgage companies are ensuring the mortgagee can afford the re-payments. Excuse me for stating the obvious, but how can generating more income from the property put the mortgage at risk? Surely all such matters can be assessed using the standard application methods?
Stand alone.
In my humble little way, I just ask that Companies make decisions because they make sense are considered and have the best interest of us all at the heart of the process. So please stop making mass decisions when it seems that they are not needed that do exactly the opposite and cause upset to people’s lives which are hard enough at the moment, especially using excuses that just do not hold water!
I
apologise, but, in my opinion, you are mistaken. Let’s discuss it. Write to me in PM.