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Santander to scrap controversial mortgage clause

Santander is getting rid of a controversial clause in its buy-to-let mortgage contracts requesting that landlords raise rents by “as much as can be reasonably achieved” whenever possible.

The wording, which was exposed by Mortgage Strategy last month, after the publication was contacted by a private landlord who had spotted the clause in her mortgage contract, has been buried in Santander’s contracts for almost six years.

The landlord said: “The public views landlords as greedy, but how many people are aware that landlords are being forced to increase rents by banks such as Santander?


“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.”

The clause had been slammed by industry figures.

Ray Boulger, senior technical director at John Charcol, commented: “This doesn’t square very well with the best interests of consumers.”

Lucy Hodge, managing director at Vantage Finance, described Santander’s clause as “excessive and disproportionate”, insisting that she could not see “any sense in it whatsoever”.

A spokesperson for Santander last week said that the policy was under review, but after insisting that “it is for the landlord to set a rent that both they and the tenant agree upon”, it would seem that the bank has dropped the clause now that it is aware “that it can be misunderstood”.

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