Let to buy mortgages are a simple solution for those who wish to purchase a new home, whilst retaining their current home to rent out.

 

Why do people choose Let to Buy mortgages?

 

• To free up cash – allows you to release equity in your current home and use it as a cash deposit on your new one. You could also rent out your old home to generate further income.

 

• Do not want to sell - allows you to keep your current home as a long-term investment and benefit from any future rises in property value. It also helps you avoid the added stresses selling a property can cause.

 

• To move when you choose - instead of being tied up in a chain or waiting for a buyer, you could opt to move sooner.

 

Who are Let to Buy mortgages best suited to?

 

Popular with couples who meet and move in together,  but already have their own homes. The couple may look to move into one of the properties, whilst renting the other out. Alternatively, they may decide to release equity in the property(s) and purchase a new one together.

 

Other things to consider

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Stamp Duty Thresholds (as taken from www.gov.uk/stamp-duty-land-tax on 22/02/2023 - rates may alter) 

The threshold is where SDLT starts to apply. If you buy a property for less than the threshold, there’s no SDLT to pay.

The current SDLT thresholds are:

• £250,000 for residential properties

• £425,000 for first-time buyers buying a residential property worth £625,000 or less

• £150,000 for non-residential land and properties

 

Tax Implications

By renting out your property, there are added taxes.

 

Landlords

If this makes you a first-time landlord, make sure you have additional funds for any rental voids or issues.