Buy-to-let mortgages
Are you unhappy with how you were advised or sold a buy-to-let mortgage? Or with the way a mortgage lender has administered or managed the mortgage since you took it out?
On this page you'll discover whether you can bring a complaint about a buy-to-let mortgage product to our service – and what will happen if you do.
On this page
Handling mortgage complaints?
What is a buy-to-let mortgage?
If you have a property you want to rent out – but you don't own it outright – you might take out a buy-to-let (BTL) mortgage.
It may be that you decide to invest in property, or that you want to let out a property you have a mortgage on but you're not living in. For example, you may:
- move out of your home to work or live elsewhere
- have inherited a property you don't want to live in.
This is known as being an ‘accidental landlord’. Since 21 March 2016, consumer buy-to-let (CBTL) mortgages have been available for accidental landlords. To qualify for a CBTL mortgage, you must not:
- own any other rental properties already, and
- have intended to rent out the property when you bought it.
Find out more about buy-to-let mortgages on the MoneyHelper website
Can I complain about my buy-to-let mortgage?
We help settle complaints about financial services and products that are regulated by the Financial Conduct Authority (FCA).
Selling – or broking – buy-to-let mortgages is currently unregulated. We can usually still consider a complaint against a lender – as long as they are regulated by the Financial Conduct Authority. But we can only consider a complaint against a mortgage broker if:
- the deal took place between 1 April 2014 and 21 March 2016 – when buy-to-let mortgages were included in the regulated activity of credit broking – but these complaints are subject to our time limit rules
- you got the advice you’re unhappy with alongside mortgage advice for a residential property as part of the same transaction – for example because you took a BTL mortgage on your existing property to finance buying a new home instead of selling your old property to raise the funds
- the advice you took was about a mortgage that either was, or should have been, a consumer buy-to-let (CBTL) mortgage.
Another thing to consider – even if you’re borrowing as an individual – is that by renting out a property you’re technically operating a business. That means we can only investigate a complaint against your lender if you satisfy the criteria for small businesses we can help.
If you’re not sure whether we can deal with your complaint, bring it to us and we will let you know.
How to complain about a buy-to-let mortgage
Our service is free and easy to use.
- Before bringing your complaint to us, you should make a formal complaint to the company involved.
- If they don't send you a final response letter within eight weeks – or you're unhappy with their response – you can complain to us.
- Our complaint checker will tell you more about some of the things we need to know upfront and help you make sure you’re ready to send us your complaint.
- Fill in our online complaint form. Your case will be assigned to a case handler who will get in touch when they start to investigate.
- To help us consider a complaint fairly, we may ask you to provide more information.
How we resolve complaints about buy-to-let mortgages
We’ll make an assessment about what happened using evidence from you, the financial business and any relevant third parties. We may consider:
- the relevant law
- any regulations that applied at the time
- any industry codes of conduct in force at the time
- your mortgage application form
- your mortgage agreement and terms and conditions
- details of any fact-finds and affordability assessments
- contact notes, including call recordings
- valuation and comparisons to local properties, including any research on rental level and local rental demand
- any completed income and expenditure checks
- correspondence between you and the lender, especially where it's relevant to the complaint, for example it concerns legal action or missed payments
- if the mortgage account is in arrears, a tariff of fees and charges setting out additional costs of administering the account while it's in arrears
- your lender’s policy on handling arrears, appointing receivers and repossession.
We may also ask additional questions or for specific information.
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Our approach to arrears charges is much the same for BTL and CBTL borrowers. We will want you to tell us:
- why you’re in arrears, and
- what you plan to do to get back on track.
Lenders don’t have to give BTL borrowers the same level of support they’d give to residential mortgage customers. And your lender is entitled to charge you for any costs it has incurred from dealing with arrears. However, we’d still expect your lender to:
- show that they’ve understood your situation
- given you the chance – or worked with you – to get your payments back on track before taking recovery action
- acted within the terms of the mortgage agreement and their policy, including by keeping any charges in line with the tariff
If your property can’t be let – because it’s in bad repair or unsuited to the local market – we’d expect you to have considered options like selling it. We would also expect your mortgage provider to give you a reasonable amount of time to make these arrangements.
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A lender can appoint a ‘receiver’ to manage the property on your behalf in certain circumstances. This is usually set out in the mortgage terms and conditions or the Law of Property Act (LPA). This is the lender’s decision.
If your lender appoints a receiver, the receiver will collect rents if the property is tenanted and work with your lender to either:
- get the mortgage back on track, or
- bring it to an end, for example, by handing your property to the lender so they can sell it
We can look at whether your lender made the decision to appoint a receiver fairly, or without giving you a chance to get the mortgage back on track yourself.
However, an LPA receiver must act as the borrower’s agent – that is, your agent – not the lender’s. This means we can’t usually consider a complaint about their decisions or charges. If you’re unhappy with the receiver’s actions, you’ll need to complain directly to them.
Sometimes we have clear evidence the receiver is taking direct instruction from the lender – rather than simply working with them. If that’s so, we’ll treat the case as a complaint against the lender, because the receiver has been acting as the lender’s agent, not yours.
We also consider complaints about the receiver’s fees being added to the mortgage debt.
If the terms and conditions allow recovery of costs – and we’re satisfied the lender appointed the receiver properly – we’ll usually say it was reasonable for them to recover these costs from you.
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We can’t overrule a court’s decision to repossess a property. However, we can look at:
- complaints about events that led to court proceedings
- whether your lender acted fairly when implementing the court’s decision.
If the mortgage lender repossessed the property without a court order, we’ll look at whether:
- the mortgage contract made provision for that
- they acted fairly – for example, by appointing receivers who then handed the property back
With both CBTL and BTL mortgages, we’d expect your lender to find out what’s happening before taking legal action or agreeing a sale against your wishes. Your lender should give you a reasonable amount of time to get the mortgage back on track if you can. However, we wouldn’t expect the lender to drag things out and let the debt increase unnecessarily.
If your mortgage provider has made a mistake, we’d usually ask them to:
- cover your extra costs caused by the mistake
- compensate you.
If you’re complaining that the lender sold the property for too little, we’d follow the same course of action we take with a residential mortgage complaint.
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We'll look at whether:
- you told the mortgage lender or broker that you needed the application to go through quickly or that you had a deadline
- they agreed to that, or made clear in good time that they couldn’t get the application through in time
- there was a delay and, if so, what caused it
If we believe that the mortgage lender or broker did something to hold up the application, we'll look at:
- how that affected you, and
- whether you lost out as a result.
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You may feel that you were given the wrong advice or mis-sold a BTL or CBTL mortgage, because:
- your broker or lender didn't check whether you could afford your BTL or CBTL mortgage when you applied for it
- the mortgage is unsuitable for another reason, for example, because the rental income is less than the mortgage payments
- you were sold the wrong product, for example, a BTL rather than a CBTL mortgage.
As set out above, we often can’t consider these complaints where the advice was given by a broker not a lender.
But where we can, we’ll consider:
- what you’ve told us about why you think the advice was wrong and what you should’ve been sold instead, and
- what the broker or lender tells about why they sold you the mortgage they did.
We'll tell you whether we believe you've been treated unfairly or not and explain how we reached our decision.
If we think you've lost money because you got the wrong mortgage advice, we'll tell the broker or lender to put things right. We may also tell them to pay you compensation for any distress or inconvenience you have suffered.
What to expect
