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Can Investors Live in Their Buy to Let Property?

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    Living in Your Own Buy-to-Let Property

    Can you live in a buy-to-let property that you own as an investor?

    It’s a good question, and at some point or another, many investors who own a buy-to-let property may contemplate the legalities of living in their property themselves.

    This may be due to construction work on their primary residence, needing somewhere to live in between moving homes, or simply wanting a place to stay while visiting a different city.

    Whatever the reason, and whether or not this would be only temporary or for an extended period, it’s a good idea to investigate whether living in your own buy-to-let property is actually possible.

    If you’re an investor asking, ‘Can I live in my buy-to-let property?‘, the following tips and information will help you.

    Are There Right to Buy Loopholes for Buy-to-Let?

    The Right to Buy scheme allows council tenants in England to buy the property they live in at a generously discounted price. The scheme is intended to benefit those who have lived in social housing for at least three years. According to MoneySavingExpert.com, the discount goes up by 1% each year after five years, up until a limit that depends on where the property is located and the property type.

    It has been reported that Right to Buy loopholes have led to these properties being used for buy-to-let investments. The scheme is intended for those who wish to live in the property for an extended period, so it is not possible to use it as a buy-to-sell or buy-to-let investment.

    In terms of buy-to-let loopholes, there is no way around this. Only a residential mortgage can be used to buy a property, and the buyer must use the property as their primary residence for the first five years.

    However, after this time has elapsed, it is possible to remortgage and switch to a buy-to-let agreement. After five years, the owner is free to rent out or sell the property, without having to repay the initial Right to Buy discount.

    If you reside outside of England, please note that the scheme has been discontinued in Scotland and Wales and is running in a more limited form in Northern Ireland.

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      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.

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      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.  

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      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.

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        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.

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        Investing in Buy to Let For the First Time? Choose RWinvest 

        If you’re investing in buy-to-let property as a first-time buyer and you’re looking to get clued up on everything you need to know, we can help you.

        We’re a property investment company with 17 years of experience connecting property investors with lucrative buy-to-let opportunities.

        We blend together affordability, quality, and the best possible returns to ensure that our investors get the most out of their buy-to-let venture.

        Now is the best time to invest in UK property, with house prices growing rapidly and rental demand at record highs.

        Contact us today to discover more about our current UK investment properties, or read the other blogs and guides for buy-to-let investors, where we cover everything from stamp duty on buy-to-let property, tips on how to invest in buy-to-let property, and much more.

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        Patrick Faulkner

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        Patrick is a property content writer at RWinvest. Keeping a close eye on the UK property market, Patrick helps our readers stay informed and up to date on the latest market news and statistics.

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          1. Living in Your Own Buy-to-Let Property
          2. Are There Right to Buy Loopholes for Buy-to-Let?
          3. Can I Live in My Buy to Let Property? 
          4. Why Can't I Live in My Property If I Have a Buy to Let Mortgage?
          5. What If I Live in My Buy-to-Let Property and Get Caught? 
          6. I Own My Investment Property Outright - Is it a Good Idea to Live in My Buy-to-Let Property? 
          7. Investing in Buy to Let For the First Time? Choose RWinvest 
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