Buy-to Let Mortgage providers have been accused of discriminating against tenants who claim benefits.
It is understood that landlords who apply for buy-to-let mortgages and in some cases landlord’s insurance are being refused products when they reveal that potential tenants are claiming benefits. The Residential Landlords Association (RLA) has carried out research which found 66% of lenders representing 90% of the buy-to-let market did not allow properties to be rented to tenants in receipt of benefits.
The research was carried out by mortgage consultants who found that TSB, Virgin and Natwest were amongst the lenders which imposed renting restrictions on landlords.
When Natwest was approached about this matter they were reported to have replied “[t]he bank has specific lending criteria and is not able to offer mortgages in certain circumstances, which are made clear on a customer’s terms and conditions. There are alternative providers who may be better suited for customers in these circumstances”.
The RLA has therefore formally written to John Glen, the Treasury Minister responsible for banking, calling for the Government to use its influence to end this type of discrimination and to end putting many landlords in an impossible situation.
Landlords who find themselves in the impossible situation of having restrictions such as these placed on them are strongly advised to find an alternative lender. Breaching any terms of a mortgage is never advised and could leave landlords in financial trouble through no fault of their own.
Since drafting this post, we have heard that Nat West have now stated that they are going to review their mortgage terms.