Everything you need to know about consumer buy to let

A consumer buy-to-let is a property which has been habited by the owner or their family member.

Many lenders have their own interpretation of consumer buy-to-let.

However, the official definition by the Mortgage Credit Directive (MCD) classifies it as a "buy to let mortgage contract which is not entered into by the borrower wholly or predominantly for the purpose of business carried on, or intended to be carried on, by the borrower."

Essentially, a consumer buy-to-let mortgage is for "accidental landlords" and may need consumer protection. They are regulated in the same way as residential mortgages, so the borrower enjoys more protection than with your average business buy-to-let mortgage.

In March 2016, the MCD introduced a legislative framework for consumer buy-to-let.

Previously, the UK buy-to-let market was unregulated by the Financial Conduct Authority. However, in 2016, the Mortgage Credit Directive was implemented to regulate the property market alongside tougher application and affordability requirements.

Their legislation aimed to distinguish "accidental landlords" in need of consumer protection from "professional landlords" who rent out property with the purpose of managing a buy-to-let business. A borrower can now declare if they are acting as a professional rather than a consumer.

Does a consumer buy-to-let mortgage apply to you?

If you have inherited property from a family member or let out their home and moved out, you may qualify for consumer buy-to-let. Please speak to one of our advisers to ensure which mortgage products might be available when considering mortgaging a consumer buy-to-let property.