Let-to-Buy Mortgages

If you're considering moving to a new home but don't want to sell your current property, let-to-buy might be the solution for you. This strategy allows you to purchase a new home while retaining your existing property as a rental. Let-to-buy involves having two separate mortgages: a residential mortgage on the property you're moving into and a buy-to-let mortgage on your previous home, enabling you to rent it out.

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The process of let-to-buy can be an attractive option for those who want to leverage the equity they've built up in their current home to purchase a new property. By doing so, you can potentially unlock the value of your existing home while keeping it as a long-term investment. This strategy not only allows you to move into a new home but also provides the opportunity to generate rental income from your former residence.

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It's important to note that let-to-buy differs significantly from buy-to-let. With a buy-to-let mortgage, you're purchasing a property specifically with the intention of renting it out from the outset. In contrast, let-to-buy involves converting your current home into a rental property as you purchase a new home for yourself. This dual-purpose approach requires careful financial planning and understanding of both the residential and buy-to-let mortgage markets.

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If you're considering let-to-buy, you'll need to assess the equity in your current home and determine how much of it can be used as a deposit for your new property. Lenders will evaluate your financial situation, including your ability to manage two mortgages simultaneously. They will also consider the potential rental income from your current home, which can be used to support the buy-to-let mortgage application.

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One of the benefits of let-to-buy is that it allows you to maintain ownership of your original property, potentially benefiting from long-term appreciation in its value while generating rental income. Additionally, it offers flexibility if you're not ready to sell your current home or if you believe the property market might improve in the future.

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However, let-to-buy comes with its own set of considerations. You'll need to ensure that you can handle the responsibilities of being a landlord, including managing tenants and maintaining the property. There are also tax implications to consider, as rental income will be subject to income tax, and you may be liable for capital gains tax if you eventually decide to sell the property.

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If you're interested in exploring let-to-buy further, our team can provide guidance on the mortgages available to you and help you understand the financial implications. We'll work with you to find suitable mortgage products for both your new home and your rental property, ensuring that you have all the information you need to make informed decisions.

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Let us help you navigate the let-to-buy process, so you can smoothly transition to your new home while keeping your existing property as a valuable investment.

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As a mortgage is secured against your home, it could be repossessed if you do not keep up the mortgage repayments.

 

The FCA does not regulate most Buy-to-let mortgages