Updated: December 09, 2021

Consumer Buy-to-Let Mortgages

Unsure if you qualify for a consumer buy-to-let mortgage? Our guide covers it all; find out what they are, how to get one and everything else you need!

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No impact on your credit score

Pete Mugleston

Author: Pete Mugleston - Mortgage Expert

Updated: December 09, 2021

Consumer buy-to-let (CBTL) mortgages are a fairly new branch off from standard buy-to-let and primarily apply to those known as ‘accidental landlords’, as well as those intending to rent their property to family members.

If you’re planning to apply for a consumer BTL mortgage or have become an accidental landlord, you’ve come to the right place. In this guide, you’ll learn how to get a consumer buy-to-let mortgage, what criteria you’ll need to meet and where to find a broker who specialises in arranging them.

What is a consumer buy-to-let mortgage?

A consumer buy-to-let mortgage is a mortgage for someone who has become an ‘accidental landlord’ or owns a property they want to let to a family member on a ‘non-professional’ basis.

You can become an accidental landlord if you find yourself in the position of owning a property you want to rent out, but have found yourself in this position unexpectedly.

This could happen for several reasons, for example through inheritance, being unable to sell your old house, and job relocation.

To give yourself a bit of leeway, you can speak to your lender to request a consent to let agreement. This would allow you to rent out your property for up to 12 months while maintaining your current mortgage.

The main differences between a consumer buy-to-let mortgage and standard buy-to-let are whom they apply to and how they are regulated.

How are they regulated?

While the Financial Conduct Authority (FCA) does not regulate standard buy-to-lets, consumer buy-to-lets are regulated by the FCA the same way as residential mortgages.

The reason the two mortgage types are regulated differently is because consumer buy-to-let mortgage borrowers have been deemed as needing more consumer protection. Increased regulation helps to safeguard ‘accidental landlords’ from entering into inappropriate buy-to-let scenarios.

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How to get a consumer buy-to-let mortgage

To get a consumer buy-to-let mortgage, applicants must be able to show that they can cover a minimum of three months mortgage payments from a UK bank account.

Here are the steps to follow to get your application off on the best possible track…

Step 1. Obtain a rental income forecast

To prove to your lender that your property is capable of generating enough rental income, you’ll need to request a rental income forecast from an Association of Residential Letting Agents (ARLA) approved letting agent or an estate agent.

Most lenders will expect your projected rental income to cover the mortgage payments by at least 125%.

Step 2. Prepare your documents and credit reports

You will need three months’ bank statements, proof of address and proof of income as well as other standard documents. If you’re wondering which documents you might need, you can find a full list in our guide to mortgage applications.

You will also need to know your credit score and have access to your credit reports. The reason for this is so you can fix any issues which could arise before your application begins. We offer a dedicated credit reports hub, which you can download your credit reports through.

Step 3. Speak to an experienced buy-to-sell mortgage broker

After you’ve prepared your documents and have your credit reports, we recommend you speak with a mortgage broker who specialises in consumer buy-to-let mortgages.

As you will be a non-professional landlord, a qualified broker will be able to assist you on your journey and help you to make the right decisions.

Our free, broker-matching service will quickly assess your needs and circumstances to pair you with a mortgage advisor who’s ideally placed to help you get the mortgage you need – Make an enquiry to get started.

What eligibility criteria do you need to meet?

To qualify for a consumer buy-to-let mortgage, you must not have originally intended for the property to be a buy-to-let. As mentioned above, this means you will have either inherited it, be unable to sell your old house, or you have relocated due to your job.

Additionally, you must not own any other buy-to-let properties, as you need to be a non-professional landlord to qualify for this mortgage type.

It is also important to bear in mind that either yourself or a family member will have had to live at the property for a period of time before you submit your application.

Your chances of getting a consumer buy-to-let mortgage will likely improve if the property will not be your main source of income.

Lenders who offer consumer buy-to-let mortgages

Notable lenders who will offer consumer buy-to-let mortgages include Santander, TSB, HSBC UK and Barclays. In addition to these high street names, more specialist lenders which offer this mortgage type are Pepper Money, Together and Accord Mortgages.

And notable absentees include NatWest, LendInvest and Foundation Home Loans.

As with any mortgage, the help of a specialist broker can dramatically improve your chances of landing a good deal and a lower interest rate. You’ll also reduce the risk of being rejected, which can affect your credit report and jeopardise future finance applications.

This is because a broker will analyse all your information before submitting it to a lender so they will know you are likely to pass.

Get matched with a consumer buy-to-let mortgage broker

Consumer buy-to-let mortgages are necessary if you find you have become an ‘accidental landlord’, and with the right advice you can uncover a quick and easy resolution to your situation.

Your best approach is to contact an experienced consumer buy-to-let mortgage broker; they will be up to date with the market and have a host of lender contacts to call upon to help with your application.

Call 0808 189 0463 or make an enquiry and we can arrange a free, no-obligation call with a consumer buy-to-let mortgage broker with the right experience today.

FAQs

Do I have to pay for an ‘accidental landlord’ license?

Yes. If you live in a part of the UK where selective licensing applies, you will need an landlord license which proves your property is up to the correct standard, and you will need to pay to get one. Contact your local council to find out whether a landlord license is needed in the area your property is based in.

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We can help! We know everyone's circumstances are different, that's why we work with mortgage brokers who are experts in Buy-To-Let mortgages. Ask us a question and we'll get the best expert to help.

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Pete Mugleston

Pete Mugleston

Mortgage Expert

About the author

Pete, an expert in all things mortgages, cut his teeth right in the middle of the credit crunch. With plenty of people needing help and few mortgage providers lending, Pete found great success in going the extra mile to find mortgages for people whom many others considered lost causes. The experience he gained, coupled with his love of helping people reach their goals, led him to establish Online Mortgage Advisor, with one clear vision – to help as many customers as possible get the right advice, regardless of need or background.

Pete’s presence in the industry as the ‘go-to’ for specialist finance continues to grow, and he is regularly cited in and writes for both local and national press, as well as trade publications, with a regular column in Mortgage Introducer and being the exclusive mortgage expert for LOVEMoney. Pete also writes for OMA of course!

FCA Disclaimer

*Based on our research, the content contained in this article is accurate as of the most recent time of writing. Lender criteria and policies change regularly so speak to one of the advisors we work with to confirm the most accurate up to date information. The information on the site is not tailored advice to each individual reader, and as such does not constitute financial advice. All advisors working with us are fully qualified to provide mortgage advice and work only for firms that are authorised and regulated by the Financial Conduct Authority. They will offer any advice specific to you and your needs.

Some types of buy to let mortgages are not regulated by the FCA. Think carefully before securing other debts against your home. As a mortgage is secured against your home, it may be repossessed if you do not keep up with repayments on your mortgage. Equity released from your home will also be secured against it.

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