SANTANDER has been criticised for a clause in its buy-to-let mortgage contracts that tellslandlords to raise rents by as much as can be reasonably achieved.
The wording has been slammed by consumer rights campaigners because it could force landlords to artificially put up rents.
Landlords income has been squeezed by changes to tax rules and a fall in rental rates over the past year.
The wording is buried in documents that have been given to Santander buy-to-let mortgage customers since 2011, but is now in the spotlight after industry magazine Mortgage Strategy was contacted by a private landlord who was concerned about its effect on tenants.
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?
Vicky Spratt, deputy editor of The Debief, who ran a campaign to end letting agent fees, told The Sun Online: This is just proof that at every stage whether letting agents or banks providing mortgages there is racketeering and everything is profit driven.
There are a lot of good landlords out there and they shouldnt be forced to artificially inflate rents so banks can make money.
Chris Norris, head of policy at the National Landlords Association, told The Sun Online: It doesnt seem to be in anyones interest. Of course, a landlord wants to maximise their income but that means coming to an arrangement with your tenants that is suitable for both parties.
Gillian Guy, chief executive of Citizens Advice, told The Sun Online: Private renters can already get a bad deal by having to put up with substandard homes or being told to move out at short notice.
Making landlords hike up rents could mean that any families that cant afford the extra costs have to uproot.
Increasing rents may not always be in the best interest of landlords either, if their tenants cant afford to pay rent then they dont collect any money for that month.
A Santander spokesperson said: It forms part of our terms and conditions because it is important to us that our customers can continue to afford their loan repayments. It is in no-ones interest for a landlord to default on a loan (including the tenant).
We recognise that it is for the landlord to set a rent that both they and the tenant agree upon.
The bank said the clause had never been enforced, but that it would now review it because it could be misunderstood by landlords.
We pay for your stories! Do you have a story for The Sun Online news team? Email us at[email protected]or call 0207 782 4094
/ 1 hour ago
NURSE strikes could hit A&E departments and cancer services as only chemotherapy, critical and...
/ 2 hours ago
THEY say Formula 1 aces know how much fuel is in the tank just...
/ 3 hours ago
OVERLOOKING a quiet pedestrianised road, the childhood home of our most famous playwright, William...