What is let to buy?
Thinking about keeping your current home and renting it out while you buy somewhere new to live? That's "let to buy" in a nutshell. Let me walk you through how it works, in plain English.
What is let to buy, in plain English?
Let to buy is when you keep the home you already own, rent it out to tenants, and buy a new home to live in — usually at around the same time. It's the route people often look at when they want to move but either can't sell their current place yet, or would rather hold on to it.
In practice it normally means two mortgages running side by side:
- A buy-to-let mortgage on your current home — the one you're moving out of and renting out.
- A residential mortgage on your new home — the one you're moving into.
The name is the giveaway: you let your old home so you can buy the next one.
How let to buy usually works
Every situation is different, but the shape is often similar:
- Your current home switches to a buy-to-let basis. You either remortgage it onto a buy-to-let deal, or ask your existing lender for permission to let it (sometimes called "consent to let"). A standard residential mortgage isn't designed for a property you rent out, so this step matters.
- You may raise capital from your current home. If it's worth more than you owe on it, some people borrow a little more against it to help fund the deposit on the new place. That means a bigger mortgage on the old home, so it's a genuine trade-off to think through.
- You buy your new home on a residential mortgage. This is assessed on your own income and outgoings, much like any home purchase.
Because two mortgages are being arranged together, lenders look at the whole picture — the expected rent on the old home and your income for the new one.
Let to buy vs buy to let vs consent to let
These sound similar and get muddled all the time, so here's the difference:
- Let to buy — you rent out the home you used to live in and buy a new one to live in.
- Buy to let — you buy a property specifically as an investment to rent out, and you never intended to live in it yourself.
- Consent to let — a temporary "yes" from your existing lender to rent your home out for a while, without fully switching the mortgage. It's often used as a short-term step.
So let to buy is really a situation — moving home while keeping the old one — made up of a buy-to-let mortgage on one property and a residential mortgage on another.
The money side: deposits, rent cover and tax
A few things tend to come up when people look at let to buy:
- Deposit or equity on the rental. Buy-to-let mortgages typically need more of a deposit than residential ones — often in the region of 20–25% of the property's value, though it varies by lender and circumstances.
- Rental cover. Lenders generally want the expected rent to comfortably clear the mortgage on the old home, commonly by a margin (you'll often see figures like around 125% or more of the mortgage payment). It's how they check the let "stacks up".
- Stamp duty. Buying an additional property usually triggers a higher rate of stamp duty (the rules differ across England, Northern Ireland, Scotland and Wales). In some cases the extra can be reclaimed if you sell your former home within a set period — the rules are strict, so it's worth proper advice.
- Tax on rent. Rental income is normally taxable, and there can be capital gains tax to think about later when you sell. A tax adviser or accountant is the right person for that detail.
Things worth weighing up
Let to buy can open doors, but it isn't one-size-fits-all. A few honest points to sit with:
- You'll be running two mortgages. If the rental sits empty between tenants (a "void period") or a tenant stops paying, you still owe on both. It helps to know you could cope with a gap.
- Becoming a landlord comes with responsibilities. Safety checks, holding deposits properly, repairs, insurance and record-keeping all come with the territory.
- Your old home is now security for a loan too. Missing payments has consequences on both properties (see the note at the bottom).
- It can tie up your plans. Selling later, remortgaging or changing your mind all have costs and rules attached.
None of this makes let to buy good or bad in itself — it depends entirely on your circumstances, which is exactly what a qualified adviser is there to work through with you.
The honest bit
I can explain how let to buy works and what all the moving parts are — but I don't give advice or tell you what to do. When you're ready, a qualified, whole-of-market mortgage adviser can look at your actual numbers and options. They're usually paid by the lender or provider, not by you, there's no fee from me for the introduction, and you're under no obligation.
Common questions
Do I need a special mortgage for let to buy?
You'll usually end up with two mortgages: a buy-to-let mortgage (or consent to let) on the home you're renting out, and a residential mortgage on the home you're moving into. They're often arranged together. A whole-of-market adviser can look at which lenders handle let to buy and how the two fit.
Can I use money from my current home to help buy the new one?
Sometimes, yes. If your current home is worth more than you owe on it, some people borrow a little more against it to help fund the deposit on their new place. That increases the mortgage on the old home, so it's a real trade-off. Whether it's possible depends on the value, your income and the lender.
Will I pay extra stamp duty with let to buy?
Usually there's a higher rate of stamp duty when you own more than one property, and the rules differ across England, Northern Ireland, Scotland and Wales. In some cases the extra can be reclaimed if you sell your former home within a set period. The detail is fiddly, so an adviser or tax specialist is the right port of call.
Is let to buy the same as buy to let?
Not quite. Buy to let is buying a property purely as an investment to rent out. Let to buy is renting out the home you used to live in so you can buy a new one to live in. The mortgages involved can look similar, but the situation is different.
Fancy talking it through with a real person?
I can explain the basics, but the actual advice comes from a qualified, whole-of-market mortgage adviser who can look at your own situation. The introduction from me is free, the adviser is typically paid by the lender or provider rather than by you, and there's no obligation — you can simply see what your options might be and decide from there, in your own time.
Find my best deal →Your home may be repossessed if you do not keep up repayments on a mortgage or any other debt secured against it. As let to buy also involves a property you rent out: your property may be repossessed if you do not keep up repayments on a mortgage or other debt secured against it. This guide is general information, not advice.