Buy to Let mortgage for family member

louhar247

Hi, I’m hoping to purchase a rental property, and ideally I’d like my Dad to rent it from me at market rates. It would just give him more security as he currently rents and he has had to move due to places being sold etc 4 times in 3 years!

However I know I will need a regulated buy to let, but I keep hearing how hard they are to get and it’s impossible to find any details. 

I’m quite sure many people rent to close family, so I guess there must be deals out there - does anyone have experience of these mortgages?
thanks

theartfullodger

Speak to a couple of buy2let mortgage brokers.  Not a new problem.

Having said that, general advice is never to rent to friends or relatives.  Quickest way to ruin a relationship.

Any experience of being a landlord?  Know anything about landlord/tenant law?

Do some landlord's education.  Or try the alternative.

km1500

Not sure what you mean by regulated.

Apply for a BTL mortgage, find a place and then let it to anyone you like, including your dad.

Bear in mind you will have significant landlord responsibilities (including licencing and upcoming epc rules) and will have to pay tax on your rent (less expenses etc)

louhar247

theartfullodger said:

Speak to a couple of buy2let mortgage brokers.  Not a new problem.

Having said that, general advice is never to rent to friends or relatives.  Quickest way to ruin a relationship.

Any experience of being a landlord?  Know anything about landlord/tenant law?

Do some landlord's education.  Or try the alternative.

Thanks, it’s more a case of necessity than anything else.

elsien

And the starter for 10 is how prepared would you be to evict him if he doesn’t pay the rent? Or if you need him out any other reason if your personal circumstances change?
Because that is the bottom line for the worst case scenario which both of you have to be prepared for.

louhar247

km1500 said:

Not sure what you mean by regulated.

Apply for a BTL mortgage, find a place and then let it to anyone you like, including your dad.

Bear in mind you will have significant landlord responsibilities (including licencing and upcoming epc rules) and will have to pay tax on your rent (less expenses etc)

On a normal btl mortgage you can’t rent to direct family. 

Yes, I’ve done the figures. Not planning on making huge profits from rent. Will keep it all in an account for maintenance, tax etc. more of a long term investment for kids.

Alderbank

No, you can't let it to anyone you like!
Especially your dad.

Lenders view letting to a family member with great suspicion. Would you, for example, throw him out on the street if he wrecks the place or pays no rent, as you probably would with a stranger?

If they agree to lend at all it will be a regulated buy to let mortgage (sometimes called a family buy-to-let mortgage).

Here is a useful guide (others are available):
https://www.nerdwallet.com/uk/mortgages/family-buy-to-let-mortgage/

km1500

Ah ok thanks for the clarification. 

How do the mortgage company check who you are letting to just out of interest ?

olilovespies

I did exactly this for my mum a couple of years ago. I ended up with Virgin Money but went through L&C as a broker. To be honest, it was as simple as any other BTL mortgage I've got in the past - speak to a broker and see what they say.

tealady

How old is your dad? 
There are housing associations who rent properties to *ahem* older tenants.
Might be worth a check on sites like ageconcernuk.
HTH