Buying a second home

debhyp

We are considering buying a second house for my parents to live in. They currently rent, but this is not an ideal long term solution. They are retired and so have no real income of their own hence they will not be able to get a mortgage.
We are trying to figure out the best way to do this and wondered if anyone else has done similar?
Would it be better to buy on a standard mortgage or a buy-to-let? I believe on a BTL you're not legally meant to rent out to relatives.
We have around 100k equity in our current house, which wouldn't cover the whole purchase price of the second property (we're thinking in the range of 120-150k).
We'd have to take out a second mortgage to cover the difference, but whether we remortgage ours so we have a larger deposit and smaller second mortgage or a smaller deposit and larger 2nd mortgage. We're not a fixed rate but do have quite a good deal with Santander (currently pay 1.25%).
I'm aware of the extra 3% stamp duty costs for second homes (don't think there's a way around this )
My brother is potentially thinking of buying in with us, in which case we'd only need to raise half the money.
Thoughts??
Is there anything we've potentially missed?
Many Thanks

foxy-stoat

You need a regulated buy to let mortgage if you want to borrow to buy your parents a place to live.

Best to go 50/50 with your brother if he can raise the cash and buy outright.

dimbo61

https://www.themelton.co.uk/buy_to_let_mortgages/family-buy-to-let-discounted-rate-for-term-3-75-copy-2/

Think this is for parents looking for children at University


https://mansfieldbs.co.uk/mortgages/family-buy-to-let-3-year-discounted-rate-dib041

This is for close Family BTL !

http://www.dailymail.co.uk/money/buytolet/article-5363437/Buy-let-mortgage-lets-rent-home-children.html

kingstreet

You can purchase a property to house dependent relatives and it isn't, or doesn't have to be, a regulated BTL.

FWIW a regulated BTL is a mortgage based on personal income, not rent, which is exactly the same as buying a property for a dependent relative. Go figure!

However, you cannot pitch up with them (your kin) at your local council and try to help them claim Local Housing Allowance to get back what you have put in!