Let-to-Buy

Let-to-buy lets you keep your current home (remortgaging it to a buy-to-let) while buying a new residential property to live in. It's different from a standard buy-to-let because you're not a landlord in the traditional sense — you're a homeowner transitioning your current place into a rental. As UK property prices have stagnated in some areas and moving costs have risen, some movers look at let-to-buy as an alternative to selling.

This guide covers how let-to-buy works, the two routes (consent to let vs full let-to-buy remortgage), stamp duty implications, and which lenders make it smooth.

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When Let-to-Buy Makes Sense

Your current home won't sell at the price you want

Rather than drop your asking price significantly, let it out and wait for market conditions to improve. Rental income may cover the mortgage, and you keep the property, along with any future rise — or fall — in its value.

In England, though, letting is a longer commitment than it used to be. Since 1 May 2026, new private lets in England are assured periodic tenancies; fixed-term assured shorthold tenancies (ASTs) and section 21 no-fault evictions have ended. In England, the grounds for moving back in or selling need at least 4 months' notice and can't be used in the first 12 months of a tenancy, so expect any let to last at least a year. If you use the selling ground and the sale falls through, you can't re-let or market the property for rent for 12 months.

You want to keep the current property for long-term capital growth

Some locations are expected to appreciate meaningfully. Keeping the property as a BTL preserves that upside.

You're relocating for work or family but expect to return

Keeping the original home (rented meanwhile) means you have a ready-made base to return to later.

You can afford two mortgages with the rental income helping

This is the core requirement. If you can't afford the new residential purchase without relying on the let-to-buy's rental income, it gets complicated.

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The Two Routes

Route 1: Consent to Let

Your existing residential lender gives temporary permission for you to rent out the property, without you needing to remortgage. You retain your existing mortgage rate and product.

When it works:

• You plan to rent out for a limited period (consent is usually granted 12 months at a time; in England, expect any let to last at least a year)
• The move is temporary (secondment, job posting, family circumstances)
• The lender is willing to grant consent

Pros:

• No new mortgage, no ERC, no product fees
• Keep your existing (often cheaper) rate
• Minimal admin

Cons:

• Usually granted for a set period or renewed yearly (often 12 months at a time; HSBC allows up to 27 months)
• Some lenders charge a fee (from nothing at Nationwide to £295 per consent at Santander; NatWest charges £120 plus £120 a year)
• Many add a loading to your rate while the home is let, typically 0.5% to 1% (Halifax and Nationwide 0.5%; Skipton 0.5% or 1% depending on LTV; Principality 1%; Accord up to 1%), while others, such as Santander and NatWest, keep your current rate
• Future portability may be complicated
• Can't be used while applying for a new residential mortgage on the new purchase (some lenders refuse new lending while you have consent to let)

Who offers it: most major residential lenders — Halifax, Nationwide, Santander, Barclays, HSBC — though terms vary significantly. Check your existing mortgage offer for the lender's stance.

Route 2: Full Let-to-Buy Remortgage

You remortgage your current home from a residential mortgage to a buy-to-let mortgage, then take a new residential mortgage on the new property. Both happen simultaneously at completion.

Most buy-to-let mortgages are not regulated by the Financial Conduct Authority.

When it works:

• You're planning to rent out long-term (2+ years)
• The rental income supports the BTL rental cover calculation
• You have equity in the current property
• You can service the new residential mortgage

Pros:

• Clean long-term structure
• No time limit — keep the BTL indefinitely
• The rent can cancel out the buy-to-let mortgage in the new lender's affordability check (a few lenders also count some of the surplus)

Cons:

• Pay ERC on the existing residential mortgage if mid-fix (unless your lender offers a fee-free let-to-buy product transfer)
• BTL rates can be similar to or a little higher than residential rates at the same LTV, and BTL deals often carry larger arrangement fees (sometimes a percentage of the loan), so compare the total cost, not just the rate
• Product fees on both mortgages
• BTL deposit/LTV requirements (usually 75–80% LTV max)
• Stamp duty surcharge on the new residential purchase (see below)

Which route is right?

Consent to let if you're renting out for a year or two and your lender is flexible.

Full let-to-buy if you're keeping the property as a BTL for 2+ years or your lender won't grant consent.

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Stamp Duty on Let-to-Buy

This is the biggest financial gotcha most buyers don't anticipate.

When you buy the new residential property while still owning the current one, you pay the higher rates on the new purchase — even though it will be your main residence. In England and Northern Ireland the higher rates add 5% to every SDLT band. In Scotland the Additional Dwelling Supplement is 8% of the whole price; in Wales the higher LTT rates apply (5% up to £180,000, rising to 17%). Use the stamp duty calculator for Scotland and Wales.

The rules

• At completion of the new purchase, you own 2+ properties
• In England and Northern Ireland, 5% is added to each SDLT band on the new property's price (Scotland: 8% ADS; Wales: higher LTT rates)
• You can claim a refund if you sell the original within 36 months

The refund window

• Sell the original within 36 months → claim the surcharge back. Claim within 12 months of the sale (or of the filing date of the SDLT return on the new home, if later).
• Don't sell within 36 months → the surcharge you paid at completion can't be reclaimed.

Practical implication: if you do a let-to-buy and plan to keep the original property, budget for the higher rates as a permanent cost. On a £350,000 new residential purchase in England or Northern Ireland, that's £17,500 extra (£28,000 ADS in Scotland).

Worked example (England and Northern Ireland)

• New residential purchase: £400,000
• Standard SDLT: £10,000
• Additional property surcharge (5%): £20,000
• Total SDLT at completion: £30,000

If you later sell the original within 36 months, you can reclaim the £20,000 surcharge. If you don't, it's gone.

In Scotland the ADS on the same £400,000 purchase would be £32,000; use the stamp duty calculator for Wales.

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BTL Mortgage Requirements

If you're going the full let-to-buy route, the BTL mortgage on your current home has specific criteria:

Rental coverage

Lenders check that rental income covers the mortgage interest by a significant margin. Typical BTL rental coverage:

• 125% minimum for basic-rate taxpayers
• 145% minimum for higher-rate taxpayers (stricter because of Section 24 tax restrictions)
• Calculated at a stress rate rather than your actual mortgage rate — on two-year fixes often about 6–7.5% (a common rule is the higher of your pay rate plus 2% or 5.5%); five-year fixes are usually assessed at or near the pay rate, about 4.5–6%

Worked example: your interest-only BTL mortgage is £1,200/month at 5.5%. Lender stresses at 7.5%, so notional monthly payment = £1,636 (£1,200 × 7.5 ÷ 5.5). At 145% cover, you need rental income of about £2,370/month. If the local rental market supports £1,800-£2,000/month, you'll fail the cover test.

Maximum LTV

Most BTL lenders go to 75–80% LTV (80% often only on smaller loans, and The Mortgage Works allows 80% for let-to-buy); a few go to 85%. So on a £400,000 property with £100,000 mortgage, you'd have 75% equity, LTV of 25% — plenty of headroom.

Personal income requirement

Some BTL lenders want £20,000–£25,000+ of personal income outside the rental; others have no minimum. If the rent falls short, a few can use your own income to plug the gap (top-slicing).

Age limits

BTL mortgages are typically available up to age 85-95 at end of term — much more generous than residential.

Product fees

BTL products typically have higher arrangement fees — £1,500-£3,000 is common.

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The Let-to-Buy Application Process

Typical sequence:

1. Affordability check — can you support two mortgages?
2. Rental assessment — local letting agents provide an estimated achievable rent
3. Provisional BTL lender approval — confirms the BTL remortgage is viable
4. Find your new residential property
5. Simultaneous completion — BTL remortgage on current home and residential purchase on new home complete on the same day
6. Start renting out — tenants move into your old home

The two mortgages are coordinated to complete on the same day. Your broker manages the timing with both lenders.

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Tax Implications

Rental income tax

Rental income is taxable. You can deduct:

• Letting agent fees
• Repairs and maintenance
• Landlord insurance
• Accountant fees
• Ground rent / service charges on leasehold

Section 24: mortgage interest relief

If you own the let property in your own name, you can't deduct mortgage interest (or other finance costs) from your rental income, whatever your tax band. Section 24 has applied in full since April 2020. Instead you get a tax reduction worth the basic rate of tax on the interest: 20% in 2026/27, rising to 22% from April 2027 when separate property income tax rates (22% / 42% / 47%) start. The reduction is limited to the lower of your finance costs, your rental profit and your adjusted total income; any unused part carries forward. Because tax is worked out on your rent before interest, Section 24 costs higher-rate taxpayers most, and it can push a basic-rate taxpayer into the higher-rate band.

Impact on let-to-buy: add your rental profit before interest to your salary to see which tax band you land in, and work out the post-tax yield on that basis.

Capital Gains Tax on eventual sale

When you eventually sell the let-to-buy property, CGT is due on the gain between purchase and sale. Private Residence Relief applies for the period you lived there plus the final 9 months. The rental period is typically chargeable.

Worked example: bought for £250,000, lived in for 8 years, let for 4 years, sold for £400,000.

• Total gain: £150,000
• Period as main residence: 8 years + 9 months = 105 months
• Period as rental: 48 months - 9 months relief = 39 months
• Taxable portion: 39/144 (about 27.1%)
• Taxable gain: £40,625
• Less the £3,000 annual exempt amount: £37,625
• CGT at 24% if it all falls above your basic-rate band: £9,030 (any part within your unused basic-rate band is taxed at 18%)

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Alternative: Just Sell and Move

Before committing to let-to-buy, consider just selling the current home and moving. Advantages:

• No higher-rates stamp duty on the new purchase
• No BTL admin, tenants, or management headache
• No long-term landlord obligations (EPC, gas safety, deposit protection and, in England, registering on the new landlord database once it opens)
• Cleaner balance sheet

When to sell instead of let:

• You don't want to be a landlord
• The math doesn't work (rental yield below 4-5% after tax and voids)
• You expect prices to fall or stagnate
• You need the capital from the sale to fund the new purchase

When to let instead of sell:

• Market conditions make selling at your target price hard
• You have meaningful expected capital appreciation
• You have enough cash to cover the higher-rates stamp duty and new mortgage without relying on sale proceeds
• You're comfortable with landlord obligations

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Frequently Asked Questions

What's the difference between let-to-buy and buy-to-let?

Buy-to-let is buying a property specifically to rent out as an investment — you've probably never lived there. Let-to-buy is converting your current home into a rental (so you can move) and buying a new residential property to live in. The mortgage products and criteria are similar, but let-to-buy involves you as a former occupier converting the property, whereas BTL is pure investment.

Do I pay stamp duty surcharge on let-to-buy?

Yes. When you complete on the new residential purchase, you still own the original property (rented out), so the higher rates apply to the new home: an extra 5% in England and Northern Ireland, the 8% ADS in Scotland or the higher LTT rates in Wales. You can reclaim it if you sell the original within 36 months (3 years), but that defeats the point of let-to-buy. Budget for it as a permanent cost if you plan to keep the BTL long-term.

Can I get consent to let instead of remortgaging?

Yes, depending on your current lender. Most major residential lenders grant consent to let for limited periods (often 12 months at a time, renewable; HSBC up to 27 months) for specific circumstances (relocation, temporary move). Long-term rental (2+ years) usually requires a full let-to-buy remortgage to a BTL product. In England, new lets are now periodic tenancies with no fixed end date, and the grounds for moving back in or selling need at least 4 months' notice and can't be used in the first 12 months, so a tenant may stay longer than your consent period; ask your lender what happens then.

Will the rental income help me afford the new residential mortgage?

Usually only to cancel out the buy-to-let mortgage, not to add to your income. Most lenders ask for a letting agent's estimate of the rent and check that it covers the new buy-to-let payment by a set margin (for example Halifax 125% of the payment, Santander 125% tested at a 5.5% stress rate, Accord 145% at 5%, NatWest 100%). If it does, the buy-to-let mortgage is left out of the affordability for your new home. If it doesn't, the shortfall counts as a monthly commitment. Some lenders, such as Barclays, count the full buy-to-let payment and ignore the rent. Only a few give credit for surplus rent (TSB counts 60% of any surplus; HSBC lets the expected rent be set against the let property's costs and payment), so don't count on the rent increasing how much you can borrow.

Do I need landlord insurance?

Yes. Standard home insurance doesn't cover rental properties. You'll need landlord buildings insurance (covering the structure) and ideally contents insurance for any fixtures/fittings you're leaving, plus liability insurance. Typical cost: £200-£500/year.

What happens to my current mortgage's product fee / arrangement fee?

If you're mid-product with your current residential mortgage, ERCs may apply if you're switching to a new product (including BTL). Some lenders offer "fee-free product transfer" from residential to BTL, avoiding ERCs — worth asking about. Otherwise, budget for ERCs on the residential plus product fees on the new BTL.

Can I use my own letting agent or do I have to let to the lender's panel?

Your choice. Lenders don't dictate who manages your rental — that's your decision. You can use a full-service letting agent (typically 10-15% of rent), a tenant-find-only service (2-10% of first month), or self-manage. The lender only cares that the mortgage is paid.

What if the tenant stops paying?

You're still liable for the mortgage. Rent arrears insurance (rent guarantee insurance) covers this for 6-12 months — typical cost £150-£300/year. Not required by lenders but widely taken.

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Related Guides

• Buy-to-Let Affordability →
• The Full Buying Journey →
• Porting Your Mortgage →
• Remortgage Affordability →
• Buying a Home Checklist →