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, let-to-buy has become one of the fastest-growing routes for movers.

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 covers the mortgage; you retain the asset and any future appreciation.

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.

The Two Routes

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 short period (typically up to 12-24 months)
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 time-limited (6-24 months)
Lender may charge a fee (£100-£500)
Lender may increase your rate (sometimes by 1-1.5%)
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.

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
Rental income can be used toward the new residential affordability (at some lenders)

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 are typically 0.5-1% higher than residential
Product fees on both mortgages
BTL deposit/LTV requirements (typically 75% LTV max on BTL)
Stamp duty surcharge on the new residential purchase (see below)

Which route is right?

Consent to let if you're renting out for 12-24 months 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.

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 3% Additional Property Stamp Duty surcharge on the new purchase — even though the new property is your main residence.

The rules

At completion of the new purchase, you own 2+ properties
3% surcharge applies to the new property's purchase price
You can claim a refund if you sell the original within 36 months

The refund window

Sell the original within 36 months → full 3% refund
Don't sell within 36 months → keep paying the 3%

Practical implication: if you do a let-to-buy and plan to keep the original property, budget for the 3% surcharge as a permanent cost. On a £350,000 new residential purchase, that's £10,500 extra.

Worked example

New residential purchase: £400,000
Standard SDLT: £10,000
Additional property surcharge (3%): £12,000
Total SDLT at completion: £22,000

If you later sell the original within 36 months, you can reclaim the £12,000. If you don't, it's gone.

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 typically 1-2% above your actual mortgage rate

Worked example: your BTL mortgage is £1,200/month at 5.5%. Lender stresses at 7.5%, so notional monthly payment = £1,800. At 145% cover, you need rental income of £2,610/month. If the local rental market supports £1,800-£2,000/month, you'll fail the cover test.

Maximum LTV

BTL mortgages typically max out at 75% LTV (some specialist lenders go to 80%). So on a £400,000 property with £100,000 mortgage, you'd have 25% equity, LTV of 25% — plenty of headroom.

Personal income requirement

Many BTL lenders want £25,000+ of personal income outside the rental (or they may require top-slicing, which is using your own income to plug a rental shortfall).

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.

The Let-to-Buy Application Process

Typical sequence:

Affordability check — can you support two mortgages?
Rental assessment — local letting agents provide an estimated achievable rent
Provisional BTL lender approval — confirms the BTL remortgage is viable
Find your new residential property
Simultaneous completion — BTL remortgage on current home and residential purchase on new home complete on the same day
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. A good broker will have experience placing both sides with lenders that work well together.

Tax Implications

Rental income tax

Rental income is taxable. You can deduct:

Mortgage interest (via Section 24 for higher-rate taxpayers — this is a tax credit, not a deduction, capped at basic rate 20%)
Letting agent fees
Repairs and maintenance
Landlord insurance
Accountant fees
Ground rent / service charges on leasehold

Section 24 (higher-rate taxpayers)

Since April 2020, higher-rate taxpayers can no longer fully deduct mortgage interest against rental income. Instead, they get a 20% tax credit. This significantly reduces BTL profitability for higher earners.

Impact on let-to-buy: if you're a higher-rate taxpayer, the post-tax yield on your BTL may be lower than you expect. Run the math carefully before committing.

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 = 104 months
Period as rental: 48 months - 9 months relief = 39 months
Taxable portion: 39 / 144 = 27%
Taxable gain: £40,500
CGT at 24% (higher rate on property): £9,720

Annual CGT allowance (£3,000 in 2026) further reduces this.

Alternative: Just Sell and Move

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

No 3% stamp duty surcharge on the new purchase
No BTL admin, tenants, or management headache
No long-term landlord obligations (EPC, gas safety, deposit protection, etc.)
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 3% surcharge and new mortgage without relying on sale proceeds
You're comfortable with landlord obligations

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 3% additional property surcharge applies to the new home. You can reclaim the surcharge if you sell the original within 36 months, but that defeats the point of let-to-buy. Budget the 3% as a permanent cost if you plan to keep the BTL long-term.

Yes, depending on your current lender. Most major residential lenders grant consent to let for limited periods (6-24 months) for specific circumstances (relocation, temporary move). Long-term rental (2+ years) usually requires a full let-to-buy remortgage to a BTL product.

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

At some lenders, yes. Many residential lenders will factor in future BTL rental income (usually at 75-80% of the market rent) toward your affordability for the new home. Check specific criteria — your broker will place the application with a lender that counts it favourably.

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.

Written by a CeMAP qualified mortgage advisor

Last updated: April 2026