Do I need a buy to let mortgage or a residential mortgage if I am letting it out to my family?

My husband and I are thinking of investing in a two or three bedroom house for our daughter and letting out the other rooms to students. She is in her first year at university in Sheffield and currently in halls of residence. Would we need to take out a buy-to-let mortgage or will a normal, residential mortgage be acceptable as the home will be for our child and her friends?

Buy to let loans are not currently regulated because they are usually considered commercial transactions. However, if you rent the property to family, the transaction becomes personal and so falls under regulated lending rules. Because of this, there are not many buy to let lenders that will accept family members as tenants. You might be able to get a residential mortgage which would be cheaper but you would have to check that the lender would be happy with lodgers too. Do get in contact if you have any further questions, or need assistance.

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