How Private Rental Property Licences affect landlords applying for a buy to let mortgage

Formerly known as Selective Licensing, landlords have expressed concern that lenders might treat them differently when it comes to applying for a buy to let mortgage.

Since 2006, Local Authorities have had the ability to introduce Private Rental Property Licences. Formerly known as Selective Licensing, PRP licensing is supposed to help LAs tackle the impact of poor quality private landlords and anti-social tenants.

The scheme is also expected to raise standards in the private rental and (I quote); "drive out unscrupulous or inept landlords".

Now I am not here to debate whether this is a good or bad thing or to give specific details on the licensing – contact your Local Authority for details of schemes in your area. What I can tell you is how these licences affect landlords applying for a buy to let mortgage.

I recently spoke to a number of contacts at several BTL lenders to find out their stance. Fortunately, the overwhelming result was that lenders will not treat these applications any differently to any other standard buy to let mortgage application.

Of course, if you need a licence, the lender will want to see it but as far as they are concerned, these properties are not going to instantly fall into the same group as HMOs - mandatory licensed properties are a different kettle of fish.

So the good news is that if you need a PRP licence for your property, you won't have pay more for your buy to let mortgage.

As ever, do get in touch on 0845 345 6788 if you would like to discuss this further. 

27th July 2015