There are many different reasons you might choose to go through the let to buy process, and our expert advisors can help you find a let to buy mortgage deal that is suited to your personal situation. 

The let to buy process allows you to purchase a new home while keeping your old home and transforming it into a property to rent out to tenants. Whether you’re purchasing an additional property for a new home, or as an investment, we always believe that mortgages should be a stress and hassle free process. You, as our customer, are always our priority, and we will endeavour to find a let to buy mortgage suited to your own circumstances. 

The let to buy process involves aspects of both the remortgage and the buy to let process. By remortgaging your current home on a let to buy mortgage, you may be able to release equity in your home to purchase a new home, maintaining your previous property to let out to tenants. The rental income from your new home can help to cover the let to buy mortgage payments for this property, while you take out a separate new residential mortgage for your new home. We will be there to help you through the entire process and make sure you understand everything, from our first meeting until completion on your new home. 

About Us

We collectively have over 100 years of experience in arranging mortgages, so why not find out a little more about us and how we can help you find your let to buy mortgage.

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Buy to Let

If you’re just considering your options for the future, why not take a look at our buy to let page as well? It also contains plenty of information about being a landlord.

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Stamp Duty Calculator

You will always have to pay stamp duty on an additional property, no matter what its value. Our stamp duty calculator can help you work out the stamp duty you could pay on your new home.

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Key Facts

The let to buy process might seem unusual, but it can be a great way to make a property investment. These key facts will help to explain the process a little more and begin to answer your questions.

1. How much can I afford?

When calculating how much you can afford for a let to buy mortgage, lenders will take the potential rent generated by your current property into consideration, as well as your income and outgoing expenses. To gain an accurate estimate of the figure you could borrow from a let to buy mortgage lender, don’t hesitate to contact us – our services are always free.  

2. Let to buy or buy to let?

Let to buy and buy to let mortgages are for landlords looking to rent out a property. While buy to let is for landlords searching for a property to let out, let to buy mortgages mean that you are already living in the property that you wish to let out, and you are looking to move elsewhere. Should you remortgage your let to buy property later on, it will be treated as a buy to let property.

3. Stamp duty and tax

You will have to pay stamp duty on any additional purchased property, no matter what the property value is. You will pay 3% on the first £125,000, and then increments up to 15% on everything over £1.5 million. If you are already or are becoming a landlord, any profit you make is also liable for income tax. We would suggest seeking the advice of a tax advisor before making this investment. 

4. What you need

To allow us to find you a let to buy mortgage deal, you will need to provide us with certain documentation and information. Take a look at our downloadable list of required documents in the Guides section for a full list of everything you need. By providing us with these documents in advance, we can find you the best let to buy mortgage deal much quicker. Our advisors are waiting to help you. 

Let to Buy Mortgage Help!

Do you have some questions about the let to buy process? You might find the answers you’re looking for right here. If you still want further information on the process, just call us – it’s free!

  • 1. What is let to buy?

    The let to buy process allows you to purchase a new home, while keeping your old home and transforming it into a property to rent out to tenants.

    Remortgaging your current property as a let to buy can allow you release equity on your current property for a deposit on a new home. It can also be useful if you are wanting to purchase a new home, but are struggling to sell your current property in time, or if it has significantly dropped in value. 

  • 2. Do I need a let to buy mortgage to rent out my current property?

    Yes, but to be sure that you are definitely looking for a let to buy mortgage product, please contact one of our expert advisors. They are always happy to hear from you. 

  • 3. What is the difference between let to buy and buy to let?

    While both let to buy and buy to let mortgages are for landlords looking to rent out a property, there are key differences. Buy to let mortgages are for landlords searching for a property to let out to tenants, or remortgage a property that is already let. Let to buy mortgages mean that you are already living in the property that you wish to let out, and you are looking to move yourself and your family to a new home elsewhere. Should you remortgage your let to buy property later on, however, it will be treated as a normal buy to let property.

  • 4. How do I get a let to buy mortgage?

    The best way to find a let to buy mortgage that suits you and your personal situation is to use a let to buy mortgage broker. 

    At Derbyshire Mortgage Services, we promise to never charge you for our services. You are always our first priority and we will do all that we can to find you the best let to buy mortgage deal for your situation. 

  • 5. How much can I borrow on a let to buy mortgage?

    How much you can afford for a let to buy mortgage will depend not only on your income and outgoing expenses, but also on how much rent could potentially be generated by your current property. 

    For an estimated figure of the amount you could borrow in a let to buy mortgage, don’t hesitate to contact us – our services are always free.  

  • 6. How much deposit do I need?

    You will need a higher deposit for a let to buy mortgage. The minimum is 20%, but 25% is most common. In order to get the best rates, you will need an even higher deposit, anywhere up to around 40% of the property value.

  • 7. Do I need a tenancy agreement?

    If you are a private landlord looking to rent a property to a tenant then you will need an Assured Shorthold Tenancy (AST) agreement. When applying for a let to buy mortgage, most mortgage lenders will insist that you have one of these, and may even ask to see a copy. 

  • 8. Are certain property types difficult to secure a let to buy mortgage against?

    Certain properties might be more difficult to secure a let to buy mortgage on due to their age, type or location. For example, there are restrictions on the number of mortgages available for ex-local authority or high rise flats. Your lender may also have restrictions on flats above commercial premises.

    If you think your current property might be difficult to secure a let to buy mortgage against, please get in touch and we’ll be happy to discuss your situation. 

  • 9. What is a House of Multiple Occupation (HMO)?

    A House of Multiple Occupation (HMO) is a property which will hold at least 3 tenants not of the same family but forming one household, sharing toilet, bathroom and kitchen facilities. Depending on the property and its location, you may require an HMO licence. The local authority for the property can provide you with further information about this licence and whether your property might require one. 

  • 10. Do I need to pay stamp duty?

    Yes. You will always be required to pay stamp duty on an additional property. For the first £125,000 of the property value, you will pay stamp duty at 3%, and this will rise in increments to 15% at anything over £1.5 million. Our stamp duty calculator can give you an accurate figure for the stamp duty you might pay on your new home. 

  • 11. Do you pay tax on let to buy property income?

    As a landlord, any profit you make from renting out a property will be liable for income tax. There are ways to reduce this tax bill by offsetting certain costs, including property repairs and maintenance, against the rental income. 

    We would advise that you seek the advice of a specialist tax advisor who can explain all of the tax implications when purchasing an investment property. We work closely with a number of skilled tax advisors who we would be happy to recommend to you, should you require their services. 

  • 12. Do you pay Capital Gains Tax on a let to buy property?

    If you sell your let to buy property for more than you originally paid for it, after deducting costs such as legal fees, estate agent fees and stamp duty, then you will be liable for capital gains tax, since you are ‘gaining capital’. 

    We would advise that you seek the advice of a specialist tax advisor who can explain all of the tax implications when purchasing an investment property. We work closely with a number of skilled tax advisors who we would be happy to recommend to you, should you require their services. 

  • 13. Do you pay inheritance tax on a let to buy property?

    Yes. Inheritance tax is still payable on a let to buy property, but the amount you pay will depend on your circumstances.

    We would advise that you seek the advice of a specialist tax advisor who can explain all of the tax implications when purchasing an investment property. We work closely with a number of skilled tax advisors who we would be happy to recommend to you, should you require their services. 

  • 14. What do I need for a let to buy mortgage?

    When applying for a let to buy mortgage we will always need the following information and documentation from you: proof of identification, proof of current address, the last 3 months of bank statements showing salary credit and any other credit or loan commitments, and the last 3 months of payslips if you are employed, or last 2 years Tax Computations (previously known as SA302s) and corresponding Tax Year Overviews if you are self-employed. A full list of required documents can be downloaded from the Guides section of the website.

  • 15. Do I need a good credit file?

    A good credit file will help you find a better mortgage deal as you will have access to a wider range of lenders. If you have had credit issues, however, our advisors may still be able to help you. Just give us a call and we can assess your situation for free.  

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