Lending options to support family in later life

Rising house prices has made it increasingly difficult for many first-time buyers to get onto the property ladder.  

One of the results we have seen because of this is a rise in the number of established borrowers purchasing a property for their immediate family members to live in and rent from them.  

Regulated Buy-to-Let’s are for when the borrower is renting the property to a close relative. Frequently used by parents to buy houses or flats for their children to rent from them, but more recently we have seen an increase in cases where adult children buy a property for their parents to live in and rent back to them.  

This could be because their parents wish to downsize or move to be closer to their families and do not want the commitment of a mortgage later in life.  

In the case of Regulated Buy to Lets the term ‘close relative’ means members of the immediate family – parents, grandparents, children, grandchildren, brothers, and sisters – but not cousins, aunts, uncles, or more distant relatives from extended family.  

The scenarios in which we can help with Regulated Buy-to-Let mortgages includes: 

  • Children renting from parents 

  • Older relatives renting from their children or grandchildren 

  • Siblings renting from siblings 

A recent example 

Mr and Mrs A wanted to purchase a property for Mrs A’s mother and father to rent from them.  

The deposit came from Mrs A’s parents, together with a contribution from Mr & Mrs A.  

The property was valued at £145,000 and we helped with a 75% LTV (Loan to Value) regulated buy-to-let repayment mortgage.  

Each lender has their own criteria regarding the proposed rental yield, property valuation, minimum deposit and in some cases an income and expenditure assessment for affordability.  

Newbury Building Society can help with regulated buy to lets. Contact our helpdesk to discuss your client’s requirements.  

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