It may feel like the right move to live in a buy-to-let property you own as a landlord – especially if you’re between homes or you simply prefer a buy-to-let property you’ve invested into your home.

However, it may not be a legal move – you might be in breach of your mortgage agreement terms and conditions. Whatever the reason you want to move into your buy-to-let property, it’s important that you research whether it’s possible.

So, is it illegal to live in your buy-to-let property? We’ve got the answers for you – read on to learn more about buy-to-let properties, and whether you can actually live in the buy-to-let property as a landlord or property investor.

What Exactly Is A Buy To Let Property?

A buy-to-let mortgage is a type of mortgage specifically for property investors/ landlords. If you want to buy a property to let out to tenants, you’ll need to either pay for the property in full or fund it with a buy-to-let mortgage.

It is considered an investment, as it can be an effective way of generating income – especially if you invest in more than one property with tenants paying rent.

However, being a landlord isn’t always easy to work, and it involves a lot of responsibility. It will be your responsibility to maintain the property and pay certain costs such as damages.

Buying a property to let out to tenants involves plenty of research. You’ll need to consider your finances – for example, property development finance, mortgage rates, tax, and repayments. You’ll also need to consider your target market – who you’ll be letting to.

If you’re buying in Liverpool, you may choose to let out to students as there are a few universities in the area. Some landlords prefer to let their properties to a family, whereas others prefer to let them out to young professionals.

Whether you’re investing in a variety of properties and using the proceeds as your main source of income, you’re buying just the one property to rent out, you must do your research – or liaise with a mortgage broker in Liverpool beforehand.

There are also pros and cons of buy to let mortgages that should be considered before getting one.

Can You Live In A Buy To Let Property?

Although it may be convenient to move into a rental residential property you own if it’s empty, unfortunately, the answer is no – you can’t live in the buy-to-let property as a landlord, whether it’s a flat or a house.

That being said, there are certain exceptions to the rule. It all depends on the type of mortgage you have – if you purchased the property in question with a buy-to-let mortgage, then it’s a firm no – you can’t live in the property. This is because you will be in breach of the mortgage terms.

The FCA (Financial Conduct Authority) categorises mortgages differently – meaning that a residential mortgage is different from a buy-to-let mortgage.

The rules of buy-to-let mortgages dictate that a buy-to-let property should only be let out to tenants, and should not be lived in by the landlord if funded by a buy-to-let mortgage.

The Local Government and the Ministry of Housing consider buy-to-let properties a part of the private rented sector, separating them from residential mortgages.

Another reason why you aren’t allowed to live in a buy-to-let home you own is that monthly rental income from tenants typically covers your monthly mortgage payments – so the lack of this income will be a concern to your mortgage lender.

Likewise, the deposit and interest rates differ between residential mortgages and buy-to-let mortgages on the market.

However, if you didn’t use a buy-to-let mortgage to fund your property purchase, then you can live in the property. This is because you paid for the property outright – you own the entirety of the property and can do what you like.

You won’t be in breach of any mortgage terms by your lender because you don’t have a mortgage on the property. Always check what terms the lenders have so you’re on the right side of your contract.

You don’t want to get caught living in your buy-to-let property – it’s always best to follow the law and stick to a residential mortgage or rent from another landlord if you need somewhere to live. If you need mortgage advice from a qualified mortgage broker, LTC Mortgages can help you.