What is let-to-buy?
Let-to-buy is where you keep your current home, remortgage it onto a buy-to-let mortgage to let it out, and simultaneously buy a new property to live in on a residential mortgage. It suits people who want to move without selling — perhaps because the market is slow, they want to keep the property as an investment, or they need to release equity from it for the new deposit. Assesr handles the buy-to-let side, packaging it into a lender-ready credit paper in around 60 seconds and matching it to specialist BTL lenders.
How does let-to-buy actually work?
A let-to-buy arrangement involves two mortgages, usually arranged together:
- A let-to-buy (buy-to-let) mortgage on your current home, which you convert into a rental. You often remortgage to a higher loan-to-value to release equity.
- A residential mortgage on the new home you are moving into.
The released equity from your existing home typically funds the deposit on the new one. Because the two are linked, lenders and conveyancers coordinate them to complete around the same time. The buy-to-let leg follows normal buy-to-let finance rules, including the rental stress test.
Why do people choose let-to-buy?
Common reasons include:
- You cannot sell easily or do not want to sell in a slow market.
- You want to keep the property as a long-term investment and benefit from future rent and growth.
- You need the equity from your current home for the new deposit and would rather release it than sell.
- You are moving in with a partner or relocating but want to retain your existing home.
What are the affordability rules?
The buy-to-let leg is assessed on the rental income the property will generate, using the interest coverage ratio at a stressed rate — just like a standard BTL. The new residential mortgage is assessed on your personal income and outgoings, but crucially the lender will usually ignore your old mortgage payment because the rent is expected to cover it. If the rent is tight, top-slicing can help — see our top-slicing guide.
What about stamp duty and tax?
Because you will own two properties on completion, the new home generally attracts the higher-rate stamp duty surcharge for additional properties. If you later sell your former main residence within the qualifying window, you may be able to reclaim the surcharge. On the rental side, your former home becomes a taxable rental business, and when you eventually sell it, capital gains tax may apply on the gain (with some relief for the period it was your main residence). These are complex points — take professional tax advice.
Should you hold the let property personally or in a company?
Most let-to-buy conversions keep the property in personal ownership, because transferring an existing home into a company would count as a sale and could trigger stamp duty and capital gains tax. If you plan to build a larger portfolio afterwards, our guide to limited-company buy-to-let explains when incorporation pays off for future purchases.
How Assesr helps with let-to-buy
Assesr packages the buy-to-let side of your let-to-buy into a lender-ready credit paper in around 60 seconds, models the rental stress test, and matches it to specialist BTL lenders comfortable with let-to-buy and equity release. We charge a quarter of the typical broker fee: the 0.5% Assesr Fee, payable on drawdown, with nothing until completion. Assesr covers unregulated buy-to-let only in the UK; the residential leg and any consumer BTL are out of our scope, so arrange those separately.
Frequently asked questions
What is let-to-buy?
Let-to-buy is where you keep your current home and let it out, remortgaging it onto a buy-to-let mortgage, while buying a new property to live in with a residential mortgage. It lets you move without selling and often releases equity for the new deposit.
Is let-to-buy the same as buy-to-let?
No. Buy-to-let is buying a property purely to rent out. Let-to-buy is converting your existing residential home to a rental so you can move on. Let-to-buy involves two linked mortgages arranged at the same time and is a common route for people who cannot or do not want to sell.
Do I pay extra stamp duty on let-to-buy?
Usually yes. Because you will own two properties after completing, the new home typically attracts the higher-rate stamp duty surcharge for additional properties, though there are rules and possible refunds if you later sell your former main residence within the qualifying period. Take tax advice.