How Let to Buy can help you launch a property portfolio

Having looked at market predictions and early year indicators in our first landlord blog of 2022, we’re back with a look at ‘Let to Buy’.  

The power of Let to Buy is something we find many Landlords are unaware of, particularly when combined with a co-living model like we run here at Lyvly. This can be central to a Landlord either looking to start a portfolio, or to enable an onwards move to proceed by removing the need to sell. 

COVID-19 certainly created notable pent-up demand in the market which was further enhanced with the stamp duty holiday, however as we move into 2022 there are growing economic and political factors which will doubtless have an impact on the London sales market.

Last week we spoke to Anthony Rose, Co-Chief Executive Officer of LDN Finance, about the subject. He comments: ‘Let-to-Buy describes both the process and a mortgage product specifically designed to allow you to rent out the home you live in, so you can afford to buy a new one. It involves you switching your existing residential mortgage to a Let-to-Buy mortgage, thereby potentially securing funds prior to applying for a new residential mortgage for the house you would like to buy. By raising additional funds at the point of remortgage, you can increase the deposit amount for your next property subject to the rent that the property receives and your income status.’

Anthony goes on, ‘the advantage of a Let-to-Buy mortgage is not only the profit you may make on the rental income, but also the profit you might make if property values increase at the time of sale. It can also help take the pressure off selling if you’re constricted by timescales in the chain.’

So, to summarise: 

  • Let to Buy is the process and mortgage product that allows you to rent out the home you live in, so you can buy another. 
  • This allows you to remortgage your house to release funds for a new deposit.
  • The quantity of funds you can unlock depends on the rent your property achieves, amongst other things.

There may be additional considerations when exploring Let to Buy, including the slightly higher interest rates that you may encounter due to the specialist nature of the mortgage. Remember, you will also have two mortgages so it’s important to consider whether or not you can stretch your finances.  It is advisable to take appropriate tax advice and to discuss with your tax adviser to make sure you’re factoring in the additional costs you may incur such as stamp duty and capital gains tax (where applicable).

As with all financial matters and planning, advice is key. Anthony and his team can be contacted on 020 3903 9875.  

Here at Lyvly, we find that those using our co-living model can materially increase their returns, helping create additional opportunities for those exploring Let to Buy. Our team is on hand to help you see how this might work for your individual circumstances. You can reach us on 020 3318 6632 or via our website


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