Writing in Property118, Mark Alexander – Founder of Property118, has outlined the case for transferring the beneficial interest of a property without the consent of the lender.

It can be seen in full here, and in summary:

Each year, thousands of UK property owners legally transfer beneficial ownership in their properties — for reasons such as tax planning, estate structuring, or joint ownership arrangements — without changing the legal title or notifying their mortgage lender.

This practice is lawful and widespread, based on the longstanding legal principle in English property law that separates legal ownership (registered title) from beneficial ownership (economic interest). As long as the legal title remains unchanged and mortgage payments are maintained, the lender’s security is not affected.

Key points:

• No consent required: Beneficial interest can be reassigned without lender approval or registration at HM Land Registry.

• Legal framework: Supported by the Law of Property Act 1925, Land Registration Rules, and routine conveyancing practice.

• Regulatory backing: HMRC, HM Land Registry, and professional bodies like the SRA and FCA all recognise and support the practice.

• Tax compliance: HMRC accepts beneficial transfers for income and capital gains tax, without requiring changes in legal ownership.

• Lender risk: There is no UK case law of a lender enforcing action solely because of a beneficial transfer — provided the legal owner remains the mortgagor and loan terms are met.

In short, transferring beneficial interest without lender consent is lawful, common, and does not breach the mortgage agreement — as long as it does not interfere with the lender’s rights.