Few things are more stressful in the property world than watching a carefully planned purchase fall apart because your existing home has not yet sold. For many, that situation feels like a dead end: you either abandon your onward purchase or take on considerable risk. In 2025, however, homeowners have another route open to them. The let-to-buy mortgage has become an increasingly important tool, allowing people to keep their chain intact, release equity from their current property, and secure a new home without being forced into a rushed sale.

In this article we explore how let-to-buy works in the modern market, why demand for the product is growing, and the opportunities it creates for both ordinary homeowners and sophisticated investors. We also examine the risks, the way lenders approach applications, and the circumstances in which it may be wiser to consider alternatives such as bridging finance.

Why Let-to-Buy Matters in 2025

The rising relevance of let-to-buy in today’s market is a reflection of several overlapping pressures. Transactions are taking longer to complete, with conveyancing bottlenecks, valuation caution, and stricter lender processes slowing the process. At the same time, many owners sitting on significant equity—particularly in London and the South East—are reluctant to discount their property to force a sale. Waiting for the right buyer can make financial sense, but it often clashes with the fixed timelines of a vendor further up the chain.

Overlaying this is the strength of the rental market. Cities such as Birmingham, Manchester, and Bristol are seeing rental demand outstrip supply, creating attractive yields for those willing to let out their former home. For some, what begins as a short-term fix evolves into a long-term investment strategy. Finally, life changes do not always align neatly with the property market. Relocating for a new job, moving closer to schools, or securing a dream property cannot always be delayed until a sale completes. Let-to-buy gives people the breathing room to act decisively.

How the Process Works

In simple terms, let-to-buy involves refinancing your current home onto a buy-to-let mortgage while simultaneously arranging a new residential mortgage for your next property. The refinance normally releases equity, which provides the deposit for the onward purchase. Meanwhile, the rental income expected from the old property is assessed by lenders to ensure the buy-to-let loan is affordable.

This creates a dual structure: you become a landlord on your former residence while taking out a fresh mortgage on your new home. Unlike bridging finance, which is short-term by design, let-to-buy can be sustainable over the long run, especially if you intend to keep the original property as part of a growing portfolio.

What Lenders Expect

Underwriting standards for let-to-buy have tightened in recent years. Lenders want assurance that the rental income comfortably covers the mortgage costs, and they often apply stress tests at higher assumed interest rates. They also expect borrowers to retain a reasonable amount of equity—typically at least a quarter of the property’s value—so that both the lender and the borrower are protected against market fluctuations.

When assessing the new residential mortgage, affordability remains central. Lenders evaluate whether you can reasonably manage both commitments at once. For those borrowing at higher levels, private banks may be more accommodating. They frequently adopt a broader view of wealth, considering investment portfolios, overseas income, and family structures, which allows for more tailored solutions than standard high street criteria. We discussed these nuances in more detail in Private Bank Mortgages Explained: Benefits and Drawbacks.

The Risks to Consider

Let-to-buy is not a universal remedy. Renting out a property introduces new responsibilities and exposes you to risks. Rental voids, unexpected maintenance costs, or problematic tenants can all undermine the cash flow that lenders rely on in their affordability assessments. Buy-to-let products also tend to carry higher rates and fees than conventional residential mortgages, which can make the arrangement more expensive than many borrowers initially expect.

Another consideration is stamp duty. Purchasing a new home while retaining your old one means you are liable for the three per cent additional property surcharge. Although this surcharge can be reclaimed if you sell the original property within three years, it does create a significant upfront cost. Beyond the financial issues, becoming a landlord imposes legal obligations—from gas safety checks to energy efficiency standards—that must be met to stay compliant.

Why It Can Be the Right Move

Despite the risks, let-to-buy can be transformative when handled correctly. It prevents chain collapses, ensures onward purchases can proceed smoothly, and enables owners to time their sale to achieve a stronger price. For some, the strategy serves as the first step into property investment, turning a former home into a profitable rental asset. For others, it is a tax-planning tool, especially when combined with company structures or portfolio management strategies. We explored the structuring question in detail in SPVs vs. Trading Companies: What Landlords Must Know in 2025.

A Case Study

Earlier this year, a Willow client in Surrey faced the prospect of losing a £1.2 million purchase because their £800,000 home had not sold. By refinancing onto a let-to-buy mortgage, we helped them release £200,000 in equity, which became the deposit on the new home.

The projected rental income comfortably met the lender’s requirements, and their new residential mortgage was approved without issue. Six months later, they sold their former property at a higher price than originally offered. What could have been a collapsed chain turned into both a successful move and an unplanned investment opportunity.

Alternatives Worth Weighing

Let-to-buy is not the only solution when sales and purchases do not align. Short-term bridging finance can be more appropriate when a sale is imminent or when buying at auction, something we explored in Buying Property Pre-Auction: Finance, Risks & Smart Moves in 2025. In some circumstances, simply obtaining consent to let from your current lender may suffice if the rental arrangement is only temporary. Others may prefer to rely on family assistance or gifted deposits to bridge the gap. The right solution depends on how long you intend to hold the old property, how much equity you can release, and how comfortable you are with the responsibilities of being a landlord.

How Willow Can Help

At Willow Private Finance we see let-to-buy as part of a wider toolkit for managing complex property transactions. We work with clients who need to move quickly, who want to build investment portfolios, and who require tailored arrangements from private banks. Because we are independent and whole of market, we are not restricted to one type of lender or one style of product. Our role is to help you weigh the risks, select the right structure, and negotiate terms that align with both your immediate needs and long-term goals.

If you are facing a chain collapse or need to unlock equity from your home to move forward, a conversation with us could save both your purchase and your peace of mind.

📞 Want Help Navigating Today’s Market?

If you’re considering a let-to-buy mortgage in 2025, timing and structure are everything. The right approach can keep your chain alive, protect your onward purchase, and even open the door to building a long-term property portfolio.

At Willow Private Finance, we’ll guide you through every step—assessing lender criteria, arranging the most competitive terms, and ensuring you move forward with confidence.