Trusted advisors for regulated Buy-to-Let mortgages.

Regulated Buy-to-Let mortgages

Your home may be repossessed if you do not keep up repayments on your mortgage. When The Bank Says No is a mortgage broker, and not a lender.

Worried about renting to a close family member? Don't be; regulated Buy-to-Lets are simpler than you think. Talk to our expert mortgage advisors today!

Your home may be repossessed if you do not keep up repayments on your mortgage. When The Bank Says No is a mortgage broker, and not a lender.

Regulated Buy-to-Let mortgages are typically seen by most lenders as high risk. Not only will mortgage lenders be wary of dealing with the strict guidelines set by the Financial Conduct Authority, but they may be concerned that you will charge close family members below the rental market value – raising questions about the potential rental income and therefore your affordability. You don't need to stress.

Our expert team have sourced specialist lenders and negotiated regulated Buy-to-Let mortgages for clients all over the UK. If you want to rent your property to a sibling, parent or child, we will seek out the most appropriate lender and regulated mortgage deals for your situation.

What is a regulated Buy-to-Let mortgage?

A regulated Buy-to-Let mortgage enables the borrower to rent their property out to immediate family members – such as a sibling, parent, child, or grandparent. The term regulated is used because mortgages of this kind must follow guidelines set by the Financial Conduct Authority (FCA). As a result, the application process for regulated mortgages can seem stricter than standard Buy-to-Let mortgages.

Many lenders shy away from approving regulated Buy-to-Let mortgages because of the added risks and strict guidelines involved. If you want to find a regulated Buy to Let mortgage deal, you will likely need to approach a specialist lender – something we can help you with! If you want to discuss your options in more detail, contact us today to get started.

Why are regulated Buy-to-Let mortgages becoming more common?

Problems with affordability with house prices for many have meant there has been a rise in recent years of borrowers with greater resources acquiring properties for their immediate family members. Usually, these are intended for the family member to live in and rent, usually at a favourable rent.

Common examples include parents buying properties for their children to live in while they are studying away from home, or even family members helping a parent or grandparent to get a property closer to their family members in their advancing years.

Letting to family members can often work well for both parties, but is not without its problems, which is why lenders tend to view regulated buy-to-lets as a riskier option. Lower rental yields due to 'family rates', or even slackness or uncertainty when it comes to the regularity or consistency of rental payments, can make lenders reluctant to lend in these kinds of circumstances.

If you are seeking a regulated Buy-to-Let mortgage deal because you are wanting to rent to a close family member, getting advice from an experienced mortgage broker at When the Bank Says No, will help you find the right lender and mortgage deal to suit your circumstances.

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Can I get a regulated Buy-to-Let mortgage with bad credit?

Yes, there are lenders out there who will consider approving loans even if there is adverse credit. In the end, it all depends on individual circumstances and the nature and recency of the bad credit.

The best thing to do if you’re concerned is to talk to a specialist mortgage advisor. Of course, with bad credit, the number of deals available to you will decrease, and the rates you face might be higher. Because you are already looking for a specialist mortgage product, this can make the process seem incredibly difficult!

Our team has a habit of achieving success for our clients against the odds. Don’t struggle on your own; we’re here to take away the stress and make a regulated buy-to-let mortgage a reality.

Can I rent my property to my relative for a rental income?

Yes, you can. A standard Buy-to-Let mortgage might not permit the letting of your property to an immediate relative, whilst more distant relatives may be allowed. If you want to rent to your immediate family, you will likely need a regulated Buy-to-Let mortgage.

However, if you are intending to let only a small part of the property to an immediate family member, you may be able to get a conventional or unregulated Buy-to-Let. For example, if it is a house of multiple occupancies (HMO) and only one bedroom is occupied by a family member, you may not need a regulated Buy-to-Let. Generally, less than 40% occupancy by a family member is usually fine, meaning that a regulated mortgage would not be required.

As regulated Buy-to-Lets are considered riskier by mortgage lenders than a standard Buy-to-Let or a residential mortgage, the expectation is that the required deposit will be a loan-to-value amount higher than normal. The majority of lenders will require a deposit of around 25%, although this may be even higher if you have any adverse credit against your credit record.

As expert mortgage brokers, we can often negotiate on your behalf to obtain a better deal for you. If you are in a position where you can provide a higher deposit then this may help you access better deals with lower rates of interest or more preferential terms.

If the family member you are renting to moves out and you want to let the property to someone unrelated to you now, you may be able to remortgage the property to a conventional Buy-to-Let mortgage. Regulated Buy-to-Let mortgages don’t tend to come with the most attractive rates, so making the switch when possible can be a great idea.

Whatever the situation, our friendly advisors will be more than happy to discuss the ins and outs of remortgaging in more detail. Talk to us whenever is convenient for you and we can start the process!

Yes, you can. The family member would simply need to apply for a standard residential mortgage. Alternatively, if you wanted to give the family member a discounted price below market value, they could apply for a concessionary purchase mortgage.

This would allow them to use the discount as their deposit and may make the purchase easier for them financially. For that reason, this is a popular option for parents selling to their children.

If you own your second home outright and there is no mortgage currently on it, you are free to do whatever you want with it. However, if the property has either a standard residential mortgage or a non-regulated Buy-to-Let mortgage, you will not be permitted to let this out to an immediate family member. You are likely to be in breach of your mortgage conditions if you do so.

The best thing to do in this situation is to talk to a mortgage advisor about remortgaging. By switching to a regulated Buy-to-Let, you will be able to lend to your children without any stress.

No. Lenders consider regulated Buy-to-Let mortgages high risk, so they tend to assess them differently than conventional Buy-to-Lets or residential mortgages. You may face stricter affordability and credit checks, including anticipated rental income, and be required to put down a larger deposit.

You also are likely to have to make repayments on the mortgage in contrast to a typical interest-only buy-to-let. However, don’t worry about your affordability unduly. Talk to our team first and we can work out the right approach for your circumstances to secure the best mortgage deals.

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Regulated Buy-to-Let Mortgage Calculator

Expert guidance for regulated buy-to-let mortgages.

Renting to a family member can be a mutually beneficial relationship for both parties, but finding a mortgage to allow this to occur can sometimes be complicated. When the Bank Says No has helped many clients apply for and achieve regulated buy-to-let mortgages.
From remortgaging to a regulated buy-to-let to purchasing a property to rent it to a family member, we can help you figure out the best approach for your circumstances, credit history and ambitions.

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