Let to Buy Mortgage

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.