Pillar Guide · Updated July 2026
Let-to-Buy Mortgages: A Complete UK Guide for 2026/27
If you want to move home without selling your current one, a let-to-buy mortgage lets you convert your existing property into a rental while buying somewhere new to live. This guide explains how it works, the tax and stamp duty implications, and how it compares to buy-to-let.
How Let-to-Buy Works
Let-to-buy typically involves two linked steps: first, switching your existing home's mortgage from a standard residential deal to a buy-to-let (or consent-to-let) arrangement so it can legally be rented out; and second, taking out a new residential mortgage to buy the property you will actually live in. Both steps are usually arranged around the same time, since most residential lenders will want to know your existing home is being properly handled before approving a new mortgage.
Let-to-Buy vs Buy-to-Let
The mortgage product used to rent out the old home is usually a standard buy-to-let mortgage, so in that sense let-to-buy and buy-to-let overlap. The key difference is the starting point and intention: buy-to-let usually means deliberately purchasing a property as a rental investment, while let-to-buy starts from a home you already live in and convert into a rental as a side effect of moving elsewhere, often driven by lifestyle needs (relocation, family, downsizing) rather than pure investment strategy.
Stamp Duty Surcharge
Because you will own two residential properties once you complete on the new home, the purchase is normally subject to the additional property Stamp Duty (or LBTT/LTT) surcharge, even though the new property is the one you will actually live in — the surcharge tests how many properties you own, not which one is your main residence. Unlike buyers who are replacing their main residence and sell the old one, most let-to-buy buyers do not qualify for a surcharge refund, since the old property is deliberately being kept rather than sold.
Getting Lender Approval
Most residential mortgages include a condition that the property must be your main residence and cannot be let out without the lender's consent. To let out your existing home, you will typically need either "consent to let" from your current lender (sometimes with a fee or rate change) or a full remortgage onto a buy-to-let product, which may be with a different lender. Lenders offering the new residential mortgage will also want to see that the rental arrangement on the old property is properly documented and affordable.
Rental Affordability Tests
Buy-to-let mortgages are assessed differently from residential ones. Lenders typically apply an interest coverage ratio (ICR) test, requiring the expected rental income to cover a set percentage of the mortgage payment — commonly in the region of 125% to 145% — calculated using a stress-tested notional interest rate rather than your actual pay rate, to ensure the rent comfortably covers the mortgage even if rates rise.
Tax Treatment of Rental Income
Rental income from the let property is taxable as property income after allowable expenses. Since the mortgage interest restriction introduced for individual landlords, finance costs (including mortgage interest) can no longer be deducted directly from rental profits; instead, you receive a basic-rate (20%) tax credit against your overall tax bill for those costs. This makes the after-tax return from a let-to-buy property more sensitive to your marginal tax rate, particularly for higher and additional rate taxpayers, compared with landlords operating through a limited company.