Keep it in the family with Furness: Regulated Buy-to-Let case study
Who did we help?
Lynn has a flat in Glasgow and wanted her two grown-up sons to move in.
What did she need?
Lynn’s mortgage deal on her flat in Glasgow was up for renewal and was trying to find a lender that would allow Lynn’s two sons to rent it from her.
“It seemed like such a good idea to rent to people I know and trust, but after being turned away by my existing provider - which was one of the UK’s biggest banks - I discovered there were only three providers in the whole of the UK that offered family buy-to-let mortgages.”
"I discovered there were only 3 providers that offered family buy-to-let mortgages."
Why were they facing challenges?
Securing a mortgage on a property that your client plans to rent out to an immediate family member can be difficult.
Lenders assume most people won’t charge their relative the full market rate and this is considered to increase the risk for both the borrower and the lender.
Due to the associated risk, you can’t get an ‘unregulated’ buy-to-let mortgage anywhere in the UK for this type of scenario. In these circumstances, the solution is a family buy-to-let mortgage, regulated by the Financial Conduct Authority, however most lenders steer clear of this type of mortgage altogether.
There were only three providers in the whole of the UK that offered family buy-to-let mortgages and one of these doesn’t lend in Scotland where Lynn’s flat was situated. This left her with two options.
“The bigger high-street brand said they would be able to consider the application but as I was 60, they required an enormous amount of information - including detailed pension forecasts. It all felt completely overwhelming.”
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