BM Solutions BuytoLet rates reduced

These new deals looked very good for me until I saw the exclusion, 'tenants claiming housing benefits' I have a wonderful single mum tenant on benefits. Surely in the current economic climate her income is more reliable than those employed in the private sector. Surely this type of exclusion should be banned, would they get away with saying no black or gay tenants? Of course not!

I totally agree Gillian, in my opinion it is totally wrong for lenders to tell us who we can and can't rent our properties to. I'm sure they hide behind reasons such as they are harder to insure etc. but so what? Can I put it into my tenancy agreement that "if you decide to attend full time education as a student, or you lose your job and claim housing benefit, rent rebate or rent allowance you must vacate immediately as that's the rules set by my lender"? Actually, yes I suppose I could add that to my tenancy agreement but I'm absolutely certain it wouldn't be enforceable. This begs the question, if lenders put these conditions into their mortgage criteria and terms and conditions of mortgage lending would a court grant possession on the grounds that the terms of the mortgage had been broken? It would be very interesting to know whether such a case had ever been taken to court and what the outcome was wouldn't it?

It does mean the lender will not take into account the fact that a LHS rent may be more than a “normal” rent when doing the valuation. So it does discount areas when the only option is to rent to LHS as no one want to live there.
Even if a court would never grant possession for breaking these terms, you may get black listed if they found out you were breaking them and it very hard to every get another mortgage.

Our view would be that any exclusion on Housing Benefits tenants is entirely unenforceable since The Private Tenacies Order in Northern Ireland and indeed general equality laws would not allow this. In particular, it is entirely open for a tenant to apply for Housing Benefit at any point in the tenancy, and a landlord could not end a tenancy on the grounds that a tenant claims Housing Benefit. Actually, we have already notified Birmingham Midshires on a number of occasions that their buy to let conditions for NI are seriously out of date and therefore unenforceable but no one seems interested!

Are you suggesting that all landlords in the British Isles can ignore this piece of lending criteria and lenders can do nothing about it?

I think the issue here is a lender makes a business decision to lende on a certain criteria.
If that criteria is changed they wold be ithin their rights to call in the loan.
A bit like someone using a residential loan for tenants either accidentially or deliberately.
Using a similar analogy a bank could cancel a credit facility of bank account if it became aware of commercial activity as opposed to consumer use only.
Not easy for a bank to find out but they are entitled to make business decisions to withdraw product6s and ther is NOTHING byou can do about it.
They don't even have to give any reasons.
It has happened to me on several occasions.
Now I know hy they have closed accounts but they won'y admit it.
They do it all under the guise of it being a businessw decision of their's.
There is no fundamental human right to be availed credit by any regulated institution in the UK.
Foreclosure is a risk that every person who has any credit in any form whatsoever faces.
If BM Solutions found out that a tenant was paying £1 in LHA monthly in addition to the rent that would be enough for the bank to foreclose.
Morally and probably financially stupid; but they can do it.
I would imagine though it would not do their PR any good; but banks as we are seeing are behaving in more bizarre ways.
LL with large positively cash flowing properties are being bankrupted as the lender WON'T refinance unless massive equity injection is made.
Banks are not behaving rationally and will continue in this fashion as long as they receive massive free QE from the Govt.