Let to buy

Let to buy, step by step

Let to buy means remortgaging your current home onto a buy-to-let mortgage, often releasing equity for a deposit, and then buying a new home to live in. Here’s how it fits together.

  1. 01

    Is let to buy right for you?

    What happens here?

    It suits people who want to keep their home as an investment, or can’t sell at the price they want. You become a landlord, with the responsibilities that come with it.

    What should you be thinking about?

    • Could you cover two mortgages if the property were empty?
    • Are you ready for landlord duties and costs?
    • Think about your long-term plans for both homes
    Properfy can help withMortgages
  2. 02

    Check you can let your current home

    What happens here?

    You’ll need your current lender’s permission to let, or to move to a buy-to-let mortgage. Leasehold flats may also need the freeholder’s consent.

    What should you be thinking about?

    • Check for early repayment charges on your current deal
    • Read your lease for any restrictions on letting
    • Check whether your insurance needs to change
    Properfy can help withMortgagesConveyancing
  3. 03

    Work out the rent and your equity

    What happens here?

    Buy-to-let lenders base what they’ll lend on the expected rent, not your salary. Get a rental valuation from a letting agent.

    What should you be thinking about?

    • Lenders often want rent to cover the mortgage by 125–145%
    • Most lenders want at least 25% equity left in the property
    • Work out how much equity you could release for your deposit
    Properfy can help withMortgages
  4. 04

    Remortgage to buy-to-let

    What happens here?

    A broker finds a buy-to-let deal for your current home. Any equity released can go towards the deposit on your next home.

    What should you be thinking about?

    • Rates and fees are usually higher than residential
    • Your current home is valued again
    • Timing matters: line it up with your purchase
    Properfy can help withMortgages
  5. 05

    Arrange your new residential mortgage

    What happens here?

    At the same time, you apply for a mortgage on the home you’ll live in. The lender will count your buy-to-let mortgage in your affordability.

    What should you be thinking about?

    • Get a mortgage in principle early
    • Use one broker for both mortgages to keep them in step
    • Have proof of the expected rental income ready
    Properfy can help withMortgages
  6. 06

    Stamp Duty and tax

    What happens here?

    Because you’ll own two homes, you’ll usually pay the higher rates of Stamp Duty on your new home. Rental income is taxable too.

    What should you be thinking about?

    • Higher-rate Stamp Duty usually applies on the purchase
    • Capital Gains Tax may apply when you sell the rental later
    • Speak to a tax adviser before committing
    Properfy can help withConveyancing
  7. 07

    Find and buy your new home

    What happens here?

    From here it’s a normal purchase: offer, solicitor, searches, survey and exchange.

    What should you be thinking about?

    • Your remortgage and purchase need to complete close together
    • Tell your solicitor it’s a let-to-buy purchase
    What happens next?
    1. 01Instruct your solicitor
    2. 02Confirm both mortgages
    3. 03Arrange your survey
    4. 04Searches and enquiries
    5. 05Work towards exchange
    Properfy can help withConveyancingSurveys
  8. 08

    Get the rental ready

    What happens here?

    Before tenants move in you’ll need safety certificates, a valid EPC, landlord insurance and a deposit protection scheme.

    What should you be thinking about?

    • Gas safety certificate and electrical safety report
    • An EPC rating of at least E
    • Choose between self-managing or a letting agent
    Properfy can help withUtilities, insurance & more
  9. 09

    Exchange, complete and move

    What happens here?

    You complete on your new home and move in. Your old home is now a rental, ready for tenants.

    What should you be thinking about?

    • Take meter readings at both properties
    • Set up landlord insurance from the day you move out
    • Redirect your post and update your address
    Properfy can help withRemovalsUtilities, insurance & more

Common questions

When should I remortgage?It’s usually worth reviewing your options around six months before your current deal ends, so you don’t move onto your lender’s standard variable rate. How much can I borrow?Lenders look at your income, outgoings, debts, deposit and credit history, and check you could still afford payments if rates rose. Should I use a mortgage broker?A broker can compare deals across many lenders and help with your application, which is especially useful if your circumstances aren’t straightforward. How much does it cost to buy a house?On top of the price, budget for your deposit, Stamp Duty (depending on the price and where you buy), legal fees and disbursements, a survey, any mortgage fees, and removals. What happens if I’m in a property chain?A chain is a line of linked sales and purchases that depend on each other.

Tell us about your move

Buying, selling, remortgaging or simply not sure where to start? Tell us what you’re trying to do and we’ll help you work out what you need.