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An alternative to let-to-buy

This article is part of
Guide to Let-to-Buy

Rob Thomas, director of research at the Wriglesworth Consultancy, says some lenders allow their borrowers to let out their properties for a period.

However he warns some lenders will impose higher rates or additional charges if they permit the mortgaged property to be let out for a period.

Some lenders, including NatWest, will allow you to take out two residential mortgages instead of having to convert one to buy-to-let or let-to-buy.

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In some cases Mark Bullard, head of sales at NatWest Intermediary Solutions, says you will require a ‘consent to let’ from the lender on your existing home before you buy the new one, although he says his lender does not require this.

Mr Bullard says: “The benefit of this approach over let-to-buy is that you could benefit from a lower rate of interest than that which usually accompanies a residential mortgage.”

Phil Rickards, head of BM Solutions, says a consent to let mortgage works in exactly the same way as a let-to-buy mortgage but does not require a remortgage.

With an improving housing market some may decide that the best alternative to let to buy is simply to sell the current property when moving, David Hollingworth, associate director of London & Country Mortgages, says.

Mr Hollingworth says: “Although Let to Buy establishes a property investment it does mean that the borrower will have a more significant level of mortgage borrowing and being a landlord is simply not for everyone.”