Can Investors Live in Their Buy to Let Property?

Can I Live in My Buy to Let Property? 

So, if you’re a property investor, can you live in a buy to let property that you’ve purchased, and more importantly, is it illegal to live in your buy to let property?

Much to some investors’ disappointment, it’s not possible to live in a buy to let property most of the time. There are, however, some exceptions.

For investors asking, ‘can I live in my buy to let property if I use a buy to let mortgage?’, the answer is no. If you’ve purchased your property with the help of a buy to let mortgage, then you can’t live in your buy to let property.

Living in a property that has been financed with a buy to let mortgage would leave you in breach of your mortgage terms, as these mortgages are designed for landlords and investors. For a property you want to live in, you need a standard mortgage.

On the other hand, you may be thinking, ‘I didn’t use a BTL mortgage, so can I live in my buy to let property?’.

If you paid for your investment property outright without the help of a mortgage, then it’s perfectly legal for you to live in your rental property for as long as you want.

This is because you already own your property and don’t have any mortgage payments to commit to.

Why Can’t I Live in My Property If I Have a Buy to Let Mortgage? 

As mentioned, if you live in a property that has been financed by a buy to let mortgage, you would be in breach of your mortgage agreement.

The Financial Conduct Authority (FCA) in the UK categorises residential mortgages and buy to let mortgages differently.

The buy to let rules and terms for buy to let mortgages dictate that a property should only be let out to tenants.

This is because the Ministry of Housing, Communities, and Local Government considers these properties part of the private rented sector.

Another factor to consider is that with a buy to let mortgage, monthly income usually covers repayments. Therefore, a lack of or complete loss of rental income is of concern to your mortgage lender.

Mortgage interest rates and the minimum deposit needed is also often higher for buy to let mortgages, which is another way that they differ from standard residential mortgages.

Long story short, it’s not worth it to try living in your buy to let property if you’re paying for the investment with a buy to let mortgage.  

What If I Live in My Buy to Let Property and Get Caught? 

If you’re caught living in a buy to let property that is financed by a mortgage, the following could happen:

• You could end up on the Rogue Landlord Database. This is a database introduced in 2018 that helps authorities identify landlords who have been found breaking the rules and/or committing illegal activity.
• If you’re found to be in breach of the Fraud Act 2006, you could face jail time and end up on a criminal record.

I Have a Buy to Let Mortgage – Can I Live in My Buy to Let Mortgage Property Without Breaking the Law? 

Suppose you’re adamant that you want to live in your buy to let property but cautious about breaking any rules or committing mortgage fraud. In that case, you could consider switching over to a residential mortgage.

It’s often possible to switch a BTL mortgage over to a residential mortgage, so it’s worth reaching out for mortgage advice to see if this is something that would work for you.

You’ll still need to complete the usual mortgage application checks. Also, not every mortgage lender who offers buy-to-let mortgages will offer residential mortgages.

Still, this is the best option if you’re serious about turning your buy to let investment into a home of your own.

If you’re looking to stay in your buy to let property temporarily or with a short-term stay, then you could also consider switching to a regulated buy to let mortgage.

This type of mortgage is more flexible and is commonly used by those who want to rent a property out to a family member.

However, keep in mind that once your stay in the property has ended, you’ll need to rent the property out to a family member rather than a member of the general public, which limits your investment potential.

I Own My Investment Property Outright – Is it a Good Idea to Live in My Buy to Let Property? 

While it’s legal to live in a buy to let property as long as you own the property outright without using a buy to let mortgage, it may not always be the best idea.

If you’re living in the property yourself, you’re missing out on the chance to make rental income from your investment, which is your sole reason behind purchasing a buy to let property in the first place.

If your property is currently occupied by tenants, you can also run into significant issues.

Moving into a property you’re currently letting out would breach your tenancy agreement and could only be done if the property is untenanted at the time you move in.

If you’re planning to evict your current tenant so that you can move into the property, you can do this under two circumstances:

• You have a long-term tenant nearing the end of their fixed-term tenancy agreement.
• You have a long-term tenant who has broken their tenancy agreement in some way, such as not paying rent or damaging the property.

Read more about evicting tenants legally and ethically in this guide from Which.