Selective licensing could lead to mortgage trouble

Some banks are reluctant to grant mortgages for properties in boroughs which use selective licensing, reports suggest.

Landlords looking to buy properties in areas which enforce selective licensing may have trouble with finding a mortgage, it has emerged.

A representative from NatWest Intermediary Solutions, a subsidiary of RBS, told Landlord Today that it is company policy not to grant buy-to-let mortgages where the landlord would require a selective license.

The basic cost of obtaining and keeping a license is one of the primary concerns voiced by banks, but uncertainty abounds over how affairs would be handled if a property had to be repossessed.

According to Landlord Today, it is not yet known how banks will react if properties they have already mortgaged become subject to licensing schemes.

Selective licensing is already common practice in a number of areas, with Oxford one of the best-known examples.

However, the London borough of Newham is the only council to enforce a blanket licensing rule at the moment, though Liverpool is now looking at following their example.

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