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Next Steps - Slightly Confused

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Hi All,

Hoping for some advice, and also hoping my ramblings make sense!

Current Situation - My Dad and I are 50/50 owners of a flat with a very small remaining mortgage. Property is worth c£170k

Hopeful Situation - Looking at the possibility of me purchasing Dad's half of the property by taking out a new mortgage (Buy to let or other), releasing some of equity for 2 purposes 1) for Dad to enjoy retirement etc and 2) allowing me to use the equity for a deposit for my own house.

The intent is to have Dad remain in the flat as a tenant to me, paying below market rent but enough to cover the new mortgage on the flat. 


1) Transfer dad's half to me and my wife, raising an Interest only mortgage c70% LTV to do so... 2) use the money raised to pay Dad and leave enough for a deposit on a residential house.. 3) Look to buy a home for me and my wife on a residential mortgage

The question - is this possible? Financially it is viable as both myself and my wife earn well enough however I am not sure on the specific's in terms of if I can have a buy-to-let mortgage as my only mortgage, or if there are issues with renting the property to a relative etc. 

Thanks for reading and I hope it makes sense! any assistance / advice is greatly appreciated.



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Hi Simon,

You're right in assuming that there are issues with renting the property to a relative, especially where the relative is the current owner of the property and would remain in the property as a paying tenant...

Most lenders don't allow the seller to stay in the property and rent it back. I appreciate it that your dad is only a co-owner, but still.

Then there's the problem of renting to a relative, which many lenders don't like. 

However, it may just be possible with a few lenders, so I recommend that you speak to a broker about the specifics. There are quite a few of us brokers here, but we can only give generic info on this forum, whereas you'll need an actual solution with figures.

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Hi lilla d,

thank you for taking the time to reply, it’s really helpful.

i have been looking in to the possibility of a regulated buy to let mortgage option as that can cater for my specifics. I think you are right, it’s best to seek formal advice.

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