The Co-operative Bank removes tenancy restrictions

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Buy-to-Let Mortgages:

Following a move by Nat West Bank last month, The
Co-operative Bank has now decided to follow suit and remove its restrictions on
its landlord mortgage borrowing.  The
traditional terms and conditions in UK buy-to-let mortgages previously
prevented landlords from letting to tenants who were claiming housing benefit.

The restrictions also usually meant that landlord borrowers’
assured shorthold tenancies (ASTs) must be restricted to a maximum of a
six-month term.

From the 1^st of April the Co-operative Bank across
all its lending brands will no longer expect landlords to follow its previous
terms, although it said that the old wording will remain in some documentation
until a final system update on 19 May.

Co-operative Bank managing director Gordon Soutar had said:

“We are glad to be able to remove this condition to the
benefit of our landlords and prospective tenants who previously may have been
restricted from taking up tenancy due to the inclusion of this letting
condition in our mortgage terms and conditions.

“Our charity partner Centrepoint have raised this issue and
the potential impact that this condition of let could have on the young people
they work with.

“This is not a condition that we want to continue to include
in the mortgages that we offer, and we will no longer enforce these clauses in
our mortgage terms and conditions.�

It is now expected that more banks and mortgage lenders will
now fall into line with the less restrictive terms. This is in the light of new
government policy, which is for landlords to offer longer tenancies and to not discriminate
against benefit claimants.

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