Buying a house on a residential mortgage for a family member to live in.

sean1990

My sister is adamant that she can purchase a house on a residential mortgage for our mum to live in, neither currently own their own property.
I have done a lot of research on the subject and everything that I have read says that if you buy a house on a residential mortgage that you must be the primary resident and if you wish to rent a house out it needs to on a buy-to-let mortgage.
I'm aware that there are some circumstances where a lender will let you rent your house out on a temporary basis as long as your initial intention was to live in the property yourself, however that doesn't apply to this situation as my sister wouldn't ever live in the house full time.
The part I think my sister has wrong is that she is under the impression that because she is planning to rent the house out to a close family member, our mum, they can get around all of the issues previously stated. But I believe she is wrong on this.
If anyone has any information on the subject that would be greatly appreciated. 

Flugelhorn

I don't think your sister can do that, the mortgage company would not want another adult living their if your sister wasn't living there 

SpiderLegs

Is she going to tell the lender that her mother will be the only one living in the property?

sean1990

SpiderLegs said:

Is she going to tell the lender that her mother will be the only one living in the property?

Yes, they would be completely honest with the mortgage lender about the circumstances.

SpiderLegs

sean1990 said:

SpiderLegs said:

Is she going to tell the lender that her mother will be the only one living in the property?

Yes, they would be completely honest with the mortgage lender about the circumstances.

Well they are probably in for a shock then.
Might be best to advise them to speak to a broker.

davidmcn

sean1990 said:

If anyone has any information on the subject that would be greatly appreciated. 

You can get all the information you need by reading just about any lender's standard mortgage conditions e.g. here are the Halifax's: https://www.halifax-intermediaries.co.uk/pdf/halifax-mortgage-conditions.pdf

See page 30:

"What you must do regarding your property

You agree to the following:

• You must use your property as your only or main home. You must not let it out, unless we agree otherwise."

xylophone

Is there any reason why your sister can't just buy a house and have your mother to live with her?

oldbikebloke

sean1990 said:

If anyone has any information on the subject that would be greatly appreciated. 

all you have to do is google "letting to a family member" or "renting to a family member" 

she will not get a residential mortgage, she will get a Regulated Buy to Let mortgage. The latter differ from an ordinary BTL in that instead of being based on the rental income, they are based on her own income, excluding rent. So in principle they are no different to a residential mortgage in terms of how much she can borrow, but in all other respects they are NOT residential mortgages, they are BTL mortgages

There are very few lenders who offer such mortgages 

here is a random google result to get you started with your own research 
https://www.onlinemortgageadvisor.co.uk/buy-to-let-mortgages/regulated-buy-to-let-mortgages/

greatcrested

sean1990 said:

SpiderLegs said:

Is she going to tell the lender that her mother will be the only one living in the property?

Yes, they would be completely honest with the mortgage lender about the circumstances.

Then I see no problem. Either

* the lender will say yes in which case it's fine or

* the lender will say no in which case your sister will look for another option

haras_n0sirrah

She can do it. There are a couple of lenders who allow a residential mortgage for a property a relative will live in 

hazyjo

haras_n0sirrah said:

She can do it. There are a couple of lenders who allow a residential mortgage for a property a relative will live in 

Are you sure you don't mean 'consent to let' after someone's already lived in the property and wants to let it out?

If not, please point us to what you're talking about as it's news to me. Thanks.