Regulated mortgage contract
A regulated mortgage contract is a loan secured on land in the United Kingdom, made to an individual or trustees, where at least 40% of the property is, or is intended to be, used as a dwelling by the borrower or a related person. That is the test in article 61 of the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001, and a loan that meets it is regulated by the Financial Conduct Authority under its mortgage conduct rules, with the affordability, advice and forbearance protections that follow. A loan that does not meet it, because the borrower will not live there, or because the borrower is a company, is unregulated.
Why most landlord borrowing is unregulated
A buy-to-let mortgage to an individual who will let the whole property to unrelated tenants fails the occupation test, so it is unregulated; so is any loan to a limited company, whatever the property's use. Unregulated does not mean unprotected: the lender must still hold FCA permissions to lend, and the loan is a business contract enforced on its terms, but the consumer affordability rules and the Financial Ombudsman route do not apply in the same way.
The exceptions
Three cases bring a landlord's loan into regulation. A consumer buy-to-let mortgage, where the borrower did not buy the property to let it or lets it to a family member, is regulated under the Mortgage Credit Directive Order 2015, with fewer lenders offering it. A bridging loan on a property the borrower or family will occupy is a regulated mortgage contract, capped at 12 months with full affordability checks, which is why a landlord chain-breaking on their own home needs a lender that offers regulated bridging. And a second-charge loan on the borrower's own home is regulated since the 2016 changes, even if the money funds a rental purchase.
What it changes in practice
Regulated lending is slower, capped at shorter terms for bridging, and available from fewer specialist lenders; unregulated lending can run to 24 months on a bridge, can be made to a company, and is priced on the asset and the exit rather than on income. Brokers must hold the right permission for each; check the FCA register for both the lender and the broker, and see our guide to choosing a buy-to-let mortgage broker.
From working with landlords across the UK, the distinction bites most often on a bridge: a landlord who will live in the property while refurbishing it has taken a regulated loan, and a lender that only offers unregulated bridging will decline it at valuation. Lenders that offer both are compared in the best bridging loan lenders for landlords and best buy-to-let mortgage lenders guides.
Last reviewed: September 2026.
