Regulated and Consumer Buy-to-Let Mortgages: When the FCA Rules Apply

Most buy-to-let mortgages are business loans and are not regulated by the Financial Conduct Authority (FCA). But two types are regulated, and they come with stronger consumer protections and different lending rules. If you are letting to a relative, or renting out a home you used to live in, you may fall into one of them.

The three types of buy-to-let lending

Business buy-to-let: you bought to let for profit. Not regulated.

Consumer buy-to-let (CBTL): an "accidental landlord", such as someone letting a former home or an inherited property, not acting in the course of business. Regulated under the CBTL regime.

Regulated buy-to-let: you or a close family member will live in the property. A regulated mortgage contract, like a residential mortgage.

Regulated buy-to-let: letting to family

If at least 40% of the property will be lived in by you or a close family member, the mortgage is a regulated mortgage contract. Close family usually means a spouse or civil partner, parents, grandparents, siblings, children and grandchildren.

Common examples include parents buying a flat for an adult child at university or work, or buying a home for an elderly parent.

Because it is regulated, the lender must assess affordability in full, much like a residential mortgage, and the adviser must hold the right FCA permissions. Rent from family is often below market level, and many lenders will base affordability on your personal income instead of rent.

Consumer buy-to-let: the accidental landlord

Consumer buy-to-let covers borrowers who are not letting as a business. The classic cases are:

• Someone who moved for work and lets their old home. • Someone who inherited a property and lets it rather than selling. • A let-to-buy, where you keep your current home and let it out.

Lenders typically treat you as a consumer if you have no other let property, or your other lets were also former homes. Having a portfolio bought to let usually makes it a business loan.

What protections do you get

• A clear explanation of the loan and its costs before you commit. • Assessment of whether you can afford it. • Fair treatment if you fall into arrears. • Access to the Financial Ombudsman Service if something goes wrong with a regulated or consumer buy-to-let.

Business buy-to-let borrowers do not get these same regulatory protections, which is why choosing the right category matters.

Fewer lenders, more checks

Not every buy-to-let lender offers regulated or consumer products. Some exclude letting to family entirely. Expect questions on who will live there, what rent they pay and why you are letting. Answer accurately: putting a business loan in place for a family let can breach your mortgage terms.

Get the right product

Tell us who will live in the property when you search. Regulated and consumer buy-to-let cases are handled by our FCA-authorised advisers, who will confirm which category applies before recommending a product.

Compare regulated and consumer buy-to-let in the complex BTL calculator. HMO, MUFB, MPOT, short-term let, holiday let and other specialist property types all use this same tool.

https://www.dynesourcer.co.uk/mortgages/complex-buy-to-let-mortgage-calculator

For standard single-let buy-to-let mortgages:

https://www.dynesourcer.co.uk/mortgages/buy-to-let-mortgage-calculator

FAQs

Can I buy a house for my child with a buy-to-let mortgage

Yes, through a regulated buy-to-let mortgage, if a lender offers one for your case.

Is letting my old home a consumer buy-to-let

Often yes, if you are not running a letting business. The lender will confirm.

Is a regulated buy-to-let more expensive

Not necessarily, but there are fewer lenders, so compare carefully.

Does the 5% stamp duty surcharge apply

Usually yes, if you will own more than one home after the purchase.

Important information

Your property may be repossessed if you do not keep up repayments on your mortgage. Most buy-to-let mortgages are not regulated by the Financial Conduct Authority. Consumer buy-to-let mortgages, and mortgages where you or a close family member will live in the property, are regulated. Dynesourcer Ltd is an Introducing Appointed Representative of Dynamic Commercial Finance Ltd, which is authorised and regulated by the Financial Conduct Authority, FRN 946483. A broker fee may be payable on application; we will tell you the amount before you proceed. This article is general information, not personal advice or tax advice. Tax treatment depends on your individual circumstances and may change. Figures correct as at 29 October 2026.

Regulated and consumer buy-to-let mortgages are regulated by the Financial Conduct Authority. Advice on these products is given only by our FCA-authorised advisers.