Regulated Family Buy-to-Let Mortgages

Many people rent their properties to family members because it allows them to ensure that their property is being well-cared for. However, there can be financial implications involved in this type of arrangement. If you’re considering renting your property to a family member, you’ll need a buy-to-let mortgage from a regulated lender.

The guide below outlines everything you need to know about the differences between a regulated mortgage and a standard buy-to-let, as well as offering tips on how to ensure your application is approved.

If you’d like to talk to someone about a buy-to-let mortgages for limited companies please call 01743 382002 or read on to learn everything you need to know.

Regulated Family Buy-to-Let Mortgages

Get started with a buy-to-let mortgage expert.

Everyone’s circumstances are different, our expert mortgage broker team have built long term relationships with specialist lenders who offer regulated buy to let mortgage packages.

Maximise your chance of approval by talking to our specialists in family buy-to-lets, contact us or call 01743 382002.

LG Embrey Financial Planning are independent financial advisers based in Shrewsbury, Shropshire under pi financial ltd, authorised and regulated by the Financial Conduct Authority

Can you rent to a family member under a buy-to-let mortgage?

Yes, you can rent to a family member but under a standard buy-to-let mortgage they must occupy less than 40% of the property, for instance renting one room while other tenants live in the rest of the property.

In most circumstances they’ll occupy more than 40% of the property – and so you’d need to apply for a regulated buy to let mortgage.

What is a regulated buy-to-let mortgage?

A regulated mortgage is a specialist product that enables the borrower to rent over 40% or more of their property to a relative. This also means the borrower (you for instance) could also live in the property with other tenants.

Just like a residential mortgage, this type of loan is also regulated by the Financial Conduct Authority (FCA). Unfortunately this kind of loan has stricter guidelines and there are less lenders offering regulated buy to let mortgages.

Lenders are aware that families may not charge the going rate for a rental property and renters may be let off with missed payments. This could cause issues with mortgage repayments, and loans perceived as more risky.

The differences between a regulated and unregulated buy-to-let mortgage

In short, when you apply for an unregulated buy-to-let mortgage you’re not planning to live in the property yourself or to rent it out to family whereas a regulated buy-to-let mortgage would allow for that to happen.

Potential scenarios for a family buy-to-let mortgage

It might make sense to get a buy-to-let mortgage for family if:

  • If you’re a parent wanting to purchase property for your child to rent
  • If your parents or grandparents move into a property you’re purchasing
  • You want to live in the house yourself alongside a tenant.
  • Your sibling will rent out your property with a partner or friend.

Eligible family members

The only way you can apply for this mortgage is if you have already chosen the family member and they have agreed to be included in this arrangement.

They could be:

  • Child
  • Sibling
  • Parent
  • Grandparent

Aunts, uncles and cousins won’t meet the criteria for this loan type.

How a buy-to-let broker can help

There are many complexities that come with trying to get a regulated buy-to-let mortgage with family tenants in mind. An expert can help you navigate all of that.

We can help you with the following:

  • To understand nuances of regulated and unregulated buy-to-let mortgages and can ensure you’re applying for the right one to suit your circumstances.
  • To quickly find lenders back family buy-to-let mortgages, which means we know which lenders are more likely to approve your application.
  • Draught your regulated buy-to-let mortgage application while also addressing any potential factors that a lender could perceive as risky.

If you get in touch we’ll arrange for our experiences buy-to-let broker with an extensive knowledge regulated mortgages to contact you straight away.

Get started with a buy to let mortgage expert.

We understand the challenges involved with limited companies entering the mortgage market, which is why we do everything in our power to give you the best rates and highest chance of approval. All our advisors are fully qualified and authorised and regulated by the Financial Conduct Authority under pi financial ltd,. Registered address: Morfe House, Belle Vue Road, Shrewsbury, SY3 7LU, Company number 3556277, FCA 186419.

To speak with us please call 01743 382002 or fill in the contact form below.


As with all other regulated mortgages, a lender will conduct a standard affordability assessment, this differs from anticipated rental income, the key factor for traditional buy-to-let mortgages.

Some of the other specific buy-to-let requirements lenders may request include:

  • An individual applicant (instead of a joint applicant)
  • A maximum LTV (loan-to-value) of 75%
  • Age restrictions (usually between 25-75)
  • Earnings (other than from rent) above £25,000 per annum to ensure affordability/

How much you can borrow

The amount you can borrow via a regulated buy-to-let mortgage will depend on your personal financial circumstances such as

  • Gross annual income
  • Outgoings
  • Age (specifically for older borrowers)

In addition, whether you meet the lender’s criteria.

The main factor for a regulated by to let mortgage is your income rather than the rent the property will bring in. To get a rough idea of affordability, multiply your income 4.5 to 5 times.

Family buy-to-let mortgage providers

Regulated buy to let mortgages are viewed as a niche product, and so there are less lenders offering family buy-to-let mortgages is a little smaller. Many of the high street banks – for example Metro Bank, Natwest, Bank of Ireland, HSBC, Santander and TSB – for example, don’t offer regulated buy-to-let mortgages.

Some of the current lenders include:

  • Virgin Money
  • Together
  • Saffron for Intermediaries
  • Bluestone Mortgages
  • Vernon Building Society

In most cases, these lenders work directly with a broker, and not the general public.

What happens if you’re caught living in an unregulated buy-to-let?

While it wouldn’t be illegal for you or a family member to be living in a property with an unregulated buy-to-let mortgage and where you take up more than 40% of the property, there are significant risks.

Your lender can request the mortgage be repaid immediately, and if you couldn’t afford to do so, you’d have to consider alternative arrangements such as selling the property.

Get started buy-to-let mortgage.

Maximise your chance of approval with a specialist in buy-to-lets. To speak with us please call 01743 382002 or fill in the contact form below.

Praise from our clients.

I didn’t think I needed a mortgage advisor as I thought all the good deals could be found on the internet. I was proved wrong! I can’t thank Lucy Jones at LG Embrey enough. A great mortgage deal plus cashback. Took all the stress out of sorting a mortgage. Highly recommended.

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I cannot recommend Steve enough! I contacted Steve in April 2017 following a recommendation to advise me on getting a mortgage. I received a fantastic service from the start to finish of the process. Steve was extremely helpful, guided me and kept me updated throughout. Steve went above and beyond in my opinion and was extremely prompt. He is very down to earth, approachable and professional, which put me at ease as a first time buyer, and made the process stress free. When I come to remortgage, or require any further financial advice I would not consider using anyone else. Steve is excellent at his job, and genuinely cares for his clients and providing them a quality service.

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After recently trying to sort through the myriad of offerings for Equity Release Lifetime Mortgages currently on the market I went to LG Embrey Financial ,and was very grateful for Steve’s expertise and help in coming to a decision. The whole process was made so much easier by Steve’s quick, sensible and professional approach.

Richard Lancaster

Speak to an experienced broker about family buy-to-let mortgages.

As this kind of mortgage is so niche, it’s important to speak to an expert with specialist mortgage experience. We have specific family buy-to-let mortgage knowledge, which means we won’t be advising you about a standard residential mortgage but we’ll ensure your application is made with regulated buy to let mortgage criteria in mind.

To speak with us please call 01743 382002 or fill in the contact form below.


Can I get a regulated buy-to-let mortgage with bad credit?

Having bad credit doesn’t mean an automatic no to an application but it will depend on the type of issue, the size of debt involved and the date it was registered. Putting down a larger deposit can offset the particular bad credit issue but this is something you should talk to a broker about.

Can my child live in my buy-to-let property?

If your mortgage is an unregulated buy-to-let then it would be a breach of the terms and conditions to have anyone living in the property who wasn’t contributing to the mortgage repayments.

Do my family members need to sign a formal tenancy agreement?

While there’s no law that says you must have a tenancy agreement in place, it does protect both parties and is highly recommended. The tenancy agreement should include how much rent is payable, when it’s due, length of the tenancy term and what the property can be used for. If you don’t have a tenancy agreement and your tenant stops paying rent, it will be much harder to evict them.

FCA disclaimer

The content contained in this article is accurate to our knowledge and up to date at the time of writing. For the latest guidance please speak of the advisors. This site is not tailored to each reader so the information does not constitute as financial advice. All our advisors are fully qualified and authorised and regulated by the Financial Conduct Authority under pi financial ltd,. Registered address: Morfe House, Belle Vue Road, Shrewsbury, SY3 7LU, Company number 3556277, FCA 186419.

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