Buy to Let Mortgage when Tenant in Situ

Take Our Quiz on BTL Mortgage when Tenant in Situ



BTL mortgage with a tenant in situ

If a property you want to buy to let already has tenants in situ, at first sight, it might seem to answer several significant issues:

  • you won’t need to spend any time advertising and selecting tenants, because they are already in place;
  • the property comes with sitting tenants, so you get to receive rent from day one;
  • if you have bought the property with tenants in situ, the seller has probably also left it furnished, so that is one less problem you need to worry about; and
  • there is unlikely to be any need for the urgent or immediate refurbishment of the property because the tenants in situ decided to stay put despite the change of ownership and landlords.

The problem

The one problem you are likely to encounter, however, is some difficulty in securing a buy to let (BTL) mortgage with a sitting tenant in place. A BTL mortgage with a tenant in situ is not impossible to obtain. You may need to look harder than normal; the pool of willing lenders is likely to be smaller; and, those you do find may charge a higher rate of interest or reduce the loan to value (LTV) ratio offered. (A specialist mortgage broker will be able to help you find a suitable lender and deal).

Why are mortgage lenders wary of lending on buy to let property with tenants in situ – and what might you do to make the prospect of your borrowing more appealing?

Your problems are likely to start with the conveyance of the property itself.


Co-op Legal Services recommends that you instruct conveyancers with the relevant commercial experience, who know that extra care and caution will be needed in addition to the usual searches that are made as a matter of course. Enquiries need to be made about the tenants themselves, for example.

The conveyancing process must involve scrutiny of all the details relating to the tenancy, including the tenancy agreement itself, when it was created, the current status of the tenants (and whether they have the Right to Rent), and whether any other aspects of legislation may affect the tenancy.

There is a long list of duties and responsibilities which you want to ensure were carried out by the previous landlord:

  • when were the last gas safety and electrical safety inspections made and were the necessary certificates issued;
  • does the property comply with national and local fire safety regulations;
  • does the local authority require a licence to be issued to operate the premises as a let property? If so, what are the terms of that licence and has the previous landlord complied with them;
  • if the let property is furnished do the items of furniture meet the current fire safety and fire resistance standards;
  • ask to see the inventory that was carried out at the beginning of the tenancy – and if there was none, ask the outgoing landlord to prepare one;
  • when is the rent due, how is it paid, and have the sitting tenants ever given any trouble or delayed paying the rent when it fell due?

Evicting the tenants

You might decide that the easiest way of getting around any problems arising from having tenants in situ is simply to evict them. Unfortunately, it is by no means as simple as that.

As insurers Direct Line point out, to evict any sitting tenants, you must first establish the type of tenancy they currently enjoy and then give them the appropriate notice to quit. The period of notice will be at least two months.

If the tenancy is still in its infancy and less than six months have passed since it commenced, you must wait until at least four months have passed before issuing any notice to quit.

If the previous landlord breached any of the important tenancy protection measures – such as keeping their deposit safe in a Tenancy Deposit Protection scheme or failing to give them a copy of the handbook How to Rent – your difficulties will be compounded, and you might not even be able to evict them at all.