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RBS adds annual fee for consent to let residential properties

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  • 10/10/2019
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RBS adds annual fee for consent to let residential properties
Royal Bank of Scotland (RBS) will charge borrowers £120 per year to rent out their property if they have a residential mortgage from December.

 

RBS said the consent to let fee recognises the additional costs and extra risks it faced when handling these cases.

Exceptions to the charge will be available, for example military customers who may need to relocate for extended periods, with the lender looking at these on a case by case basis.

The lender wrote to customers in June outlining the changes and giving a six-month notice period.

The first charge will be applied to customers’ accounts on 24 December and will be applied to all new and existing customers.

Fees apply on Royal Bank and NatWest mortgages at present, however the lender said it expects to roll this out to its other brands shortly.

There is also no compulsion on borrowers to convert to a buy-to-let mortgage at the end of their fixed product term, they can maintain a standard residential mortgage with the consent to let on the property and continue to pay the fee.

 

‘Fairly reflects costs’

Despite the fee it is still likely to remain a cheaper way for people who decide they want to rent out their property as buy-to-let products are typically higher cost.

For example, a residential purchase two-year fix at 60 per cent loan to value (LTV) with £995 fee from NatWest is currently available at 1.21 per cent.

However, the reciprocal buy-to-let deal is currently available at 1.53 per cent, with many lenders having starker differences.

A NatWest spokesperson said: “Our residential mortgages are for owner occupiers. We recognise that sometimes circumstances may change and owners may want to let their property out and therefore apply for consent to let.

“If this is granted, there is an annual fee of £120 which fairly reflects our additional costs and offers better value than buy-to-let mortgage products for these customers.”

 

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