Santander to get rid of controversial mortgage clause
After much controversy, Santander has said it is going to scrap its buy-to-let mortgage contract clause, that requests landlord to increase rents by, ‘as much as can be reasonably achieved’ where possible.
This controversial wording was exposed last month by Mortgage Strategy, after a private landlord has spotted the clause in her mortgage contract. It appears that the clause has been in Santander’s contracts for nearly six years.
Wording
The landlord in question noted: ‘The public views landlord as greedy, but how many people are aware that landlords are being forced to increase rents by banks such as Santander?’[1]
‘The Santander contract states that when rents are up for renewal the landlord must get written advice from a qualified valuer (as to) whether the market rent at the date of the review is likely to be higher than the rent currently payable.’[1]
Unsurprisingly, the clause has been slammed by leading industry figures.
Santander to get rid of controversial mortgage clause
Ray Boulger, senior technical director at John Charcol, observed: ‘This doesn’t square very well with the best interests of consumers.’[1]
Meanwhile, Lucy Hodge, managing director at Vantage Finance, called Santander’s clause as: ‘excessive and disproportionate’, stating she could not see: ‘any sense in it whatsoever.’[1]
Last week, a Santander spokesperson stated that the policy was under review, but said, ‘it is for the landlord to set a rent that both they and the tenant agree upon.’ Now however, the bank has moved to drop the clause altogether after acknowledging that, ‘it can be misunderstood.’[1]
[1] https://www.landlordtoday.co.uk/breaking-news/2017/2/santander-tells-landlords-to-raise-rents-by-as-much-as-can-be-reasonably-achieved