Sometimes you want to move to a new home but keep your current one — perhaps to rent it out rather than sell, perhaps because it is not the right time to sell. Let-to-buy is the arrangement that makes that possible, and it is more common than many people realise.

What let-to-buy means

Let-to-buy involves two mortgages at once. You switch your existing home onto a let-to-buy mortgage (effectively a buy-to-let, so you can rent it out), and you take a new residential mortgage on the home you are moving into. You end up owning two properties: one you live in, one you let.

It is the mirror image of buy-to-let. With buy-to-let you buy a property specifically to rent out. With let-to-buy you let out the home you already live in, so that you can buy your next one.

Why people do it

There are several reasons. You might believe your current home will rise in value and want to hold onto it. You might be moving for work or family and expect to return. You might simply be unable to sell in the current market and prefer to let rather than accept a low offer. And releasing equity from your current home through the let-to-buy mortgage can sometimes provide the deposit for the new one.

What’s involved

Let-to-buy is more complex than a straightforward move because two mortgages have to work together. Lenders will assess whether the expected rent on your current home covers the let-to-buy mortgage, and whether you can afford the new residential mortgage. The two applications need to be arranged so they complete in step. There can also be tax and stamp duty implications of owning a second property, which — as with any tax question — you should check with an accountant.

Making it work

Because let-to-buy involves coordinating two mortgages with potentially two different lenders, each with their own criteria, it benefits from someone arranging the whole picture rather than treating the two mortgages separately. Getting the timing and the numbers to line up is the difference between a smooth move and a stalled one.

We arrange let-to-buy across the whole market, handling both mortgages so they work together and complete on time. If you want to keep your current home and buy your next, get in touch and we will talk you through whether let-to-buy is right for you.