BTL that doesn't exclude family

[Dinosauraddict]

Hi, am looking at buying a BTL next year. It'll be my first BTL. There's a chance I'll want a family member to rent it for some of the time as the sort of property I'm after would suit their circumstances and give them a better quality of life. I would do this as an AST, protect the deposit and do the gas safety checks etc, but my question is with the mortgage - I know a lot exclude renting to family on a standard BTL, and would want a second home/residential mortgage, but my understanding is you then couldn't charge rent? (We would need to charge rent to cover the mortgage, although will have savings to cover void periods etc.) Any advice? Or would there be a better type of mortgage if I decided I was happy just to rent to family and not commercially at all?

There are many mortgages that do let you do this but I you have to have a slightly higher deposit

the reason many mortgage providers do this is because in the event that your family-member got into financial difficulties and stopped paying rent, you would probably hesitate to initiate eviction proceedings. certainly no insurer would insure you against loss of rental income as the possibility of collusion between related landlords and tenants would be too great. this means the bank is taking a greater risk in lending to you compared to a normal btl deal. so obviously some banks will decline to take on the additional risk, while others will accept the risk with an appropriately inflated profit margin.

Yes I completely understand the added risk for the lender and wouldn't expect insurance for void periods. I'll have a 25% deposit and I think I'll need a 'regulated' BTL mortgage. But info online seems very minimal. May use a broker (which I've never done before) as I think it will be rather complex, but has anyone ever taken out a regulated BTL mortgage?