Consent to Let vs Buy to Let: What’s the difference?

Renting out your property can help you stay on top of your mortgage payments and potentially bring in an income too. But before handing your tenants a set of keys, you’ll need to decide what to do with your mortgage.

If you’d like to become a landlord and invest in property over the long term, it can make sense to switch your residential mortgage to a Buy to Let mortgage. If you’re not sure what the future holds and you might want to sell or move into your property in the next few years, it might be easier (and possibly cheaper) to keep your residential mortgage. To do this, you’ll need what’s known as ‘Consent to Let’.

Key Takeaways

• Consent to Let is a temporary agreement (usually up to 24 months) allowing you to rent out your home on a residential mortgage.
• Buy to Let is a specific mortgage type for long-term property investors and landlords.
• Consent to Let is ideal for avoiding Early Repayment Charges (ERCs) if you are moving temporarily or struggling to sell.
• You must obtain formal permission from your lender for a Consent to Let to avoid breaching your contract or committing mortgage fraud.
• Rental income from Consent to Let is still subject to tax, though some relief may apply.

What is Consent to Let?

Consent to Let is a formal agreement between a homeowner and their mortgage lender, giving the homeowner permission to rent out their property for a set period of time. If you’d like to rent out your property without switching from a residential mortgage to a Buy to Let mortgage, you must get your lender’s consent before taking in any tenants. This is because when you buy a property using a residential mortgage, there’ll usually be a clause within your mortgage agreement that says you must live in the property yourself.

If you let the property out without permission, you’re likely to be in breach of your contract. In some cases, this could even be considered mortgage fraud. Your lender might repossess your home or insist that you repay the remainder of your mortgage immediately.

Why do people get Consent to Let?

There are lots of reasons why people get Consent to Let, from temporarily leaving their home to go travelling, or moving out to a new place. Here are the four main reasons why people apply for Consent to Let mortgages:

1. You have a fixed-term mortgage

If you’ve got a fixed-rate mortgage and you’d like to move house before the end of your fixed-term, renting out your property could help you avoid Early Repayment Charges (ERC) and fees. You could get Consent to Let for the remainder of your fixed-term and switch to a Buy to Let mortgage or sell the property once it’s ended.

2. You’re going travelling

If you’re going travelling, getting Consent to Let your property will make it easier to pay your mortgage while you’re away. If your property is in a popular or expensive area, you might even make enough to fund your travels!

Learn more: How much tax do you pay on rental income?

3. You’re moving in with someone else

If you’re moving in with your partner, friends or family but you aren’t ready to sell your own property just yet, Consent to Let can give you time to decide on your long-term goals. If you need to pay rent or contribute towards the mortgage on your new home, renting out your existing property may help you increase your income.

You might also like: What you need to know about buying with a partner

4. You’ve moved house, and you’re struggling to sell your old one

If you’ve moved house but you’ve been unable to sell your existing property, getting Consent to Let could allow you to make an income from your old home, without having to commit to a Buy to Let mortgage. For example, you might decide to rent it out for 6 months to a year before putting it back on the market.

How long does Consent to Let last?

Most Consent to Let agreements last for 24 months or less. If you need your agreement to last longer than this, your lender might agree to a longer-term arrangement. They may charge an annual fee for this extension, but the fees can sometimes be worthwhile if switching to a Buy to Let mortgage would be more expensive.

How to get Consent to Let

Most lenders let you apply for Consent to Let online, which is usually the quickest and easiest way to get started. Alternatively, you might be able to request an application form over the phone, in branch, or download one online before posting it back to them. Each lender’s process is slightly different, but you’ll usually need to explain why you need Consent to Let and how long you need it for.

You might also need to provide proof, such as travel documents, a contract of employment if you’re moving away for work, or a Mortgage in Principle for your new property.

Is consent to let better than buy to let?

Consent to Let:

• Duration: short-term (usually <24 months)
• Mortgage type: residential with permission
• Best for: Temporary moves or avoiding ERCs
• Flexibility: High (can move back in easily)

Buy to let

• Duration: (Long-term/permanent)
• Mortgage type: Specific BTL Mortgage
• Best for: Professional landlords/lenders
• Flexibility: Low (requires remortgaging to move)Learn more: How to remortgage to buy another property

Is it difficult to get Consent to Let?

Getting Consent to Let is usually a fairly straightforward process since most lenders are happy to give customers permission to rent out their homes for a short period of time. There are exceptions, however. If you bought your home through Help to Buy or a shared ownership scheme, subletting your property won’t usually be allowed unless you’re a member of the Armed Forces.

Do mortgage lenders offer Consent to Let?

It's rare, but some lenders might refuse to give consent to Let. Lenders will usually have a set of criteria that needs to be met before they give a borrower permission to rent out their property.

Common lender requirements

• Income: Many lenders require a minimum salary to ensure you can cover gaps in tenancy.
• Equity: You typically need a certain amount of equity in the home; low-deposit mortgages are harder to convert.
• History: Most lenders require you to have held the mortgage for at least 6-12 months.
• Reliability: A clean payment history with no recent defaults or missed payments is essential.

What happens when Consent to Let ends?

When your Consent to Let agreement ends, you'll need to follow the original terms of your residential mortgage again. This means you’ll no longer be able to rent your property out to tenants.

Your lender might be willing to extend the Consent to Let, particularly if you’re only planning to rent out the property for a few more months. It’s a good idea to speak to your lender and find out what options are available before your agreement runs out.

Can you switch from Consent to Let to Buy to Let?

Yes, it is possible to convert your existing Consent to Let mortgage. If your lender is unwilling to extend your Consent to Let, it might be possible to convert your existing mortgage into a Buy to Let mortgage. Switching to a new mortgage will usually result in a new interest rate and changes to your repayments, particularly if the homeowner switches from a repayment mortgage to an interest-only Buy to Let.

Learn more: How to get a buy-to-let mortgage

Do you pay tax on Consent to Let?

Yes, you’ll usually need to pay tax on your rental income, even if you’re using Consent to Let instead of Buy to Let. There are tax advantages to renting out your property, though. While your property is being rented out, you can claim back 20% tax relief on your mortgage interest.