Buy to let mortgage - renting to family member

Johnandabby

I've been looking for a buy-to-let mortgage provider who will allow you to rent to a family member, but it's explicitly prohibited by all mainstream lenders that I have approached so far.

Has anyone found a provider who will do this? I wonder how many people don't check or tell their mortgage provider, but I want to do it legitimately.

Thanks for your help!

Yorkie1

You need a regulated BTL product, which is less common than a standard BTL product.

Many BTL products are only available through brokers anyway, so best to contact an independent broker and take it from there.

By the way, will the family member be claiming housing benefit? If so, you'll need a formal tenancy agreement and to charge full market rent.

kingstreet

A regulated BTL may be based on your personal income/affordability and not on the rental income.

Johnandabby

Yorkie1 wrote: »

You need a regulated BTL product, which is less common than a standard BTL product.

Many BTL products are only available through brokers anyway, so best to contact an independent broker and take it from there.

By the way, will the family member be claiming housing benefit? If so, you'll need a formal tenancy agreement and to charge full market rent.

Thanks for the info. No housing benefit involved, just trying to help a relative move out of a dodgy area.

Johnandabby

kingstreet wrote: »

A regulated BTL may be based on your personal income/affordability and not on the rental income.

Thanks - we know that we could afford the combined mortgages (the BTL and our own) at standard mortgage rates, but will have to find out from an independent broker whether regulated BTL are any higher. I guess that if they aren't commonplace then there is a good chance that the rates or app fees will be higher than standard BTL.

kingstreet

There's not much difference in rates, assuming the same LTV for each. A whole market broker will probably be able to find you the best deal as direct deals don't dominate the BTL sector, as they do the "vanilla" residential market (sub 60%).