Guidance on subletting your shared equity mortgage property

The following guidance is for shared equity mortgage (SEM) holders that are administrated directly with Hampton Mortgage Servicing Limited and owned by our clients.

Are you able to let your property when you have an existing SEM in place?

No, your SEM contract does not allow you to let your property to someone else. This is because the shared equity product was designed to assist borrowers to get on the housing ladder and was not, or is not, intended to support buy to let or investment properties. If you let the property without permission from your lender, you will be in breach of your contract and will be required to pay back the SEM with immediate effect. In this event, your lender would be within their rights to take legal action against you to recover the sums outstanding. They would also be within their rights to begin charging the default interest as outlined in your loan agreement from the date of the breach.

Under certain exceptional circumstances permission to let may be considered on a case-by-case basis, however this is at the total discretion of the client. Please contact us (link) if you wish to discuss this further.

I am considering letting my property. How can I go about doing this?

Each request for consent to let is considered on a case-by-case basis however it is very rare to do so. To assist you, we have provided some examples that are considered exceptional and where consent to let may be given:

  • If one member of your household is a serving member of the British Armed Forces or a crown servant serving overseas or at a base further than 50 miles or 90 minutes travelling time away from their property and you as a family are required to move away for a fixed period;
  • If you are required to move because a close family member requires you to be their primary carer;
  • If you had written pre-approval from your homebuilder when you purchased the property and that approval has not expired.

If you feel your circumstances are exceptional, please send relevant information which evidences this to Examples of relevant information include:

  • Evidence from your first charge mortgage holder that they have given consent to let.
  • Evidence of your posting (if in the armed forces or a crown servant).
  • Evidence from a doctor, hospital or health organisation that confirms you are required as a primary carer and the location of this.
  • Evidence of pre-approval to let the property from the homebuilder.

Please note that any consent to let will only be given for a specific period and does not remove any obligations or responsibilities that you hold as the owner of the property. In addition, please be aware that any consent to let does not change, amend or alter the obligation and responsibility to repay the shared equity mortgage on the repayment date or in the event of sale or re-mortgage of the property.

Are there any fees associated with granting consent to let?

All fees that can be charged by Hampton Mortgage Servicing Limited are laid out in the tariff of fees, which are provided as part of the annual statement. There is a charge (currently £90) associated with granting the formal approval to let, which is payable when permission is given. A representative of Hampton Mortgage Servicing Ltd will inform you when this fee is due.

Do I have any other options if consent to let is not granted?

The consent to let only needs to be gained via Hampton Mortgage Servicing Limited if your property has a SEM*. If the SEM is paid in full, consent is no longer required. It may be possible to repay the SEM at any time; please visit the ‘Repaying your shared equity mortgage’ (link) section of the website on the step-by-step process of how you can do this.

You should seek independent financial advice on which option is best for you and whether repaying early is in your best interests. Hampton Mortgage Servicing Limited is not regulated to provide advice.

* Please note you may still need to gain permission or meet other requirements from your first charge holder who you may have a mortgage with (e.g. bank or building society etc), and you will need to consider these separately.