‘Let to rent’ – where a home owner rents their home out and then rents a place in another location – is becoming more popular in the UK, according to experts.
Whilst the concept isn’t new, it is becoming far more prevalent as an alternative living option, with the cost of moving, place of work and school catchment areas often being a factor.
Other scenarios include short term work contracts and sabbatical periods, whilst some wanted to move, but couldn’t bear the idea of selling their much loved property.
“One of the biggest factors in this trend is the rising cost of moving, and the difficulties that many owners are encountering in replacing their existing mortgage with a similar deal,” said David Brooke Smith of Stacks Property Search.
“Families who want to live in a specific catchment area, or who want to be close by for a child’s limited time at a particular school, are letting out their home and renting one close to the school,” he points out.
While let to rent can often be a win-win situation, there are several factors that need careful consideration before making a decision, most importantly the figures – it is important to remember that rental income will be taxable.
“You can offset costs related to the property you’re letting, but you can’t offset the actual cost of renting. So if you want a level playing field, the figure you have available for your rental may need to be less than the figure you can achieve for letting your property out,” he explains.
Home owners looking to rent out their property also need to consider that they will need to get consent from their mortgage provider, who may or may not insist on changing the mortgage to a buy to let deal.
Those looking to pursue ‘rent to let’ will also need to have specialist Landlord Insurance in place.