Rules tightened on renting homes by banking industry

According to recent reports the banking industry has decided to clamp down and tighten the rules when it comes to renting out homes.

The new regulations mean that homeowners that are hoping to rent their property out on a short term basis could struggle to get the permission that they need from their banks. Many people think about renting their home out on a short term basis if it is going to be sitting empty for a period of time.

Amongst the people that may think about renting their home out on a short term basis are those that are going abroad for a period of time to work or study, those looking to climb the property ladder, and those that are thinking of travelling for a while.

In the current climate being able to rent out the home on a short term basis rather than leaving it empty has enabled many people to make a little extra cash to help with the financial strain.Just a few years ago most people had no problems if they wanted to rent out their home on a short term basis.

However, since the onset of the financial crisis this is a situation that has changed, and more lenders are now clamping down and making it increasingly difficult for homeowners to do this. Many lenders are demanding that homeowners that wish to let their homes on a short term basis come in and attend an interview to outline their letting plans, and even then there is no guarantee that they will get permission.

One mortgage broker stated: ‘Over the last ten years lenders have been very blasé about granting consent for homeowners to let out their property. They’ve had so much business coming in that they’ve let this sort of thing sneak through. But now they’re cottoning on to the fact that property owners have been taking out residential mortgages and then letting out.’

Tags: mortgage, short term basis, industry, fact, lenders, last ten years