30 September 2025 | Written by Mercantile Trust
Unregulated vs Consumer Buy to Let: What’s the Difference?
Navigating the rules around Buy to Let (BTL) Mortgages can sometimes feel complicated - particularly when a case involves Consumer Buy to Let or falls outside standard criteria. At Mercantile Trust, we want to make it as straightforward as possible for you to know whether we can help.
This guide walks you through the key questions to ask before submitting an application, so you can quickly determine whether your client’s case is likely to fit our lending criteria.
What Is Consumer Buy to Let?
A Consumer Buy to Let Mortgage applies to “accidental landlords” who have inherited or previously lived in a property and is subject to limited FCA oversight. These cases are regulated, and as a result, we don’t offer Consumer Buy to Let Mortgages.
On the other hand, an Unregulated Buy to Let is for professional landlords or investors who are buying, or have already bought, property as a business and is not subject to FCA regulation. These are the types of cases we can typically support.
Three Quick Questions to Help You Assess a Case
Before you pick up the phone or submit an application, ask these questions:
1. Has the Customer Ever Lived in the Property?
✅ Yes, but they own other properties: We can help.
✅ Yes, it’s their only property but the application is through a limited company or for a second Buy to Let purchase: We can help.
❌ Yes, it’s their only property and the application is personal: This is classed as Consumer Buy to Let, and unfortunately, we can’t help.
2. Did the Customer Inherit the Property?
✅ Yes, and they own other properties: We can help.
✅ Yes, it’s their only property but the application is through a limited company or for a second buy to let: We can help.
❌ Yes, it’s their only property and the application is personal: This would fall under consumer buy to let, so unfortunately we can’t help.
3. Has a Close Family Member Ever Lived in the Property?
✅ Yes, but the borrower owns other properties: We can help.
✅ Yes, it’s their only property but the application is through a limited company or for a second buy-to-let: We can help.
❌ Yes, it’s their only property and the application is personal: This is treated as consumer buy to let, so unfortunately we can’t help.
Important: If the current tenant is a close family member, we’re unable to proceed with the application.
Close family includes: spouse, parents, children, grandparents, siblings, and grandchildren.
Key Takeaways for Brokers
- If the borrower owns other properties, we can usually help.
- If it’s the borrower’s only property, we can often help if the loan is:
- through a limited company, or
- for the purchase of a second Buy to Let property.
- We can’t offer loans for Consumer Buy to Let cases.
- We can’t proceed if the current tenant is a close family member.
Why Speak to Us Early
Not every case is straightforward, and sometimes there are grey areas. If you’re unsure whether a particular case is eligible, talk to our team before submitting an application. We’re happy to guide you through the details so you can give your clients clarity from the start.
At Mercantile Trust, we pride ourselves on a common-sense, flexible approach to lending. We consider the full story - not just the numbers - so you can focus on helping your clients move forward with their property plans.
Final Thoughts
Understanding the distinction between consumer Buy to Let and Unregulated Buy to Let is crucial when it comes to placing your client’s mortgage. By running through these three simple questions, you can save time and ensure your application is on the right track.
If in doubt, contact us directly - we’re always happy to help you find the right solution.
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