Hannah owns her own home. She is buying a flat in Bristol with a mortgage so that her widowed mother can live there, paying Hannah a modest rent. Hannah will never live in the flat. How is Hannah's new mortgage classified?
The flat will be used as a dwelling, so RAO 2001 art 61(3)(a) is met, and neither buy-to-let exclusion applies: an investment property loan and a consumer buy-to-let contract both require that the property is not occupied by the borrower or a related person (RAO art 61A; Mortgage Credit Directive Order 2015 art 4), and art 61(4) makes a parent a related person. So this is a regulated mortgage contract with full MCOB protection, whether or not rent is paid. Her mother does not need to be a party to the loan.
Treating any loan on a property the borrower will not live in as buy-to-let, even when a parent or child will live there.
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