Lenders may fight shy of selective licensing properties, warning
Landlords looking to expand their portfolios are warned that some lenders are not willing to lend on properties in areas of selective licensing and others are considering their policies.
Royal Bank of Scotland has said that it will not do so. A spokesman for RBS subsidiary NatWest Intermediary Solutions said: “I can confirm that it is our current policy, and has been for some time, to not accept applications for buy-to-let mortages where the landlord requires a selective licence.
“We will continue to monitor and regularly review our policies in accordance with changing market conditions.”
Concerns that lenders have with licensing include the potential costs to landlords, as well as the ongoing basic cost of a licence, and what happens if the property has to be repossessed.
It is not clear how lenders would react if a property currently mortgaged with them were to be taken into the scope of a licensing scheme in future.
Newham remains the only local authority in England where blanket licensing of every rental property in the borough must be licensed. However, there is extensive selective licensing in Oxford and elsewhere, and Liverpool is considering following Newham’s blanket lead.
We would be interested to know from landlords whether they are encountering reluctance from lenders in areas of selective licensing.