The arrangement helps a borrower finds a residential mortgage for a new property while converting the mortgage on their original property into a permission to let or buy-to-let mortgage.
John Charcol senior technical manager Ray Boulger said demand was particularly high in large cities with a buoyant rental market, such as London: “Our experience is that the popularity of let-to-buy has been progressively increasing since the nadir of the buy-to-let (BTL) sector in 2009.
“This is primarily attributable to home owners’ renewed confidence in the housing market, coupled with the increasing demand for rental property.”
However, many high street lenders overlooked Let to Buy and it remained the preserve of independent advisers, he said.
As well as reducing the stress associated with moving house, tax relief associated with owner occupation means Let to Buy can also be a means of reducing capital gains tax.
A report published last month indicated many mortgage holders were attempting to let out their properties without informing the mortgage provider – with such cases rising by 41% in 2012.
