The short answer
Selling turns the home into cash now and, if it was your main home the whole time you owned it, usually with no Capital Gains Tax. Letting keeps the property and adds an income, along with a landlord’s duties, the tax on the rent and, when you sell later, possibly some Capital Gains Tax. Letting makes sense when the rent covers every cost with room to spare and you want to keep the property.
Two things catch people out. You need your mortgage lender’s permission before a tenant moves in. And since 1 May 2026 a tenancy has no fixed end, so getting the house back later takes a legal ground and months of notice, set out below.
When this comes up
A job in another city, a move in with a partner, a few years abroad, or a home that has sat on the market without an offer. People in this position are often called accidental landlords: they never planned to let, and the decision has to be made in weeks.
The four questions that decide it
- Do the numbers work? Take the rent you can realistically get and subtract the mortgage, landlord insurance, repairs, safety checks, a month or two of empty time a year, agent or software costs and the tax on the profit. If what is left is thin, a boiler or a bad tenant wipes it out
- Will you want it back? GOV.UK’s “Grounds for possession: guidance for landlords and letting agents” (updated 1 May 2026, read 20 October 2026) says Ground 1 (you or your family moving in) and Ground 1A (selling) cannot be used to make a tenant leave within the first 12 months of a new tenancy, and need 4 months’ notice. A tenant can still decide to stay and wait for a court order. GOV.UK’s “Guide to the Renters’ Rights Act” adds that after using either ground you cannot market or re-let the property for 12 months, so a sale that falls through does not mean you can simply let again
- Will you live abroad? GOV.UK’s “Tax on your UK income if you live abroad” (read 20 October 2026) treats you as a non-resident landlord if you live abroad for 6 months or more a year. A letting agent, or a tenant paying more than £100 a week, then deducts basic rate tax from the rent unless HMRC approves your application to be paid in full
- Who will run it? Rent, repairs, safety checks and a tenant’s calls do not stop because you moved. Decide whether that is you, a letting agent, or you with software
Before a tenant moves in, step by step
- Ask your lender. GOV.UK’s “Renting out your property” says you must get permission from your mortgage lender (read 20 October 2026). A lender may agree consent to let on your current mortgage or ask you to move to a buy-to-let mortgage
- Change your insurance. A home insurance policy is written for an owner living there. Tell your insurer and move to landlord cover before the tenancy starts
- Get the safety and energy paperwork. The same GOV.UK guide lists keeping the home safe and free from hazards, gas and electrical safety, an Energy Performance Certificate, smoke and carbon monoxide alarms, and checking each tenant’s right to rent in England
- Plan the deposit. It must be protected in one of the government-approved schemes, with the required information given to the tenant, within 30 days of receiving it
- Sort out the tax. GOV.UK’s “Renting out your property: paying tax and National Insurance” (read 20 October 2026) says the first £1,000 of rental income is tax-free under the property allowance, that you report on a Self Assessment return if the income is above £2,500 after allowable expenses or £10,000 before them, and that you contact HMRC if it is between £1,000 and £2,500. Making Tax Digital for Income Tax applies when qualifying income from self-employment and property is over £50,000 from 6 April 2026, over £30,000 from 6 April 2027 and over £20,000 from 6 April 2028
The tax when you sell later
GOV.UK’s “Tax when you sell your home” (read 20 October 2026) gives full Private Residence Relief only when the home was your main home for all the time you owned it, among other conditions. Its page on letting out your home adds that the last 9 months you owned it are relieved even if you were not living there. Letting Relief only applies if you lived in the home at the same time as your tenants, and is capped at £40,000.
Its page on living away from your home lists absences that still qualify, where it was your only home or the one you nominated, and you lived in it before and after unless your work prevented you: up to 3 years in total for any reason, up to 4 years if you had to live elsewhere in the UK for work, and any length of time working outside the UK. So a job move you plan to come back from is treated differently from a move for good.
In practice: move out for good, let your former home for some years and sell it later, and the part of the gain that belongs to the let years, apart from those final 9 months and any absence that qualifies, can be taxed. GOV.UK’s “Capital Gains Tax rates” gives 18% and 24% from 6 April 2026, with a £3,000 allowance for 2026 to 2027 (read 20 October 2026).
Comparing the two with real numbers
- Selling: the price you would accept, less agent and legal fees and the mortgage. That is the cash you would have today
- Letting: a year of rent, less every cost in the first list above and the tax on the profit. Then the property’s value later, less the Capital Gains Tax on the let years
The free keep-or-sell calculator was built for buy-to-let owners but works the cash-flow side the same way, and the rental income tax calculator shows the tax on the profit.
How LetCompliance runs it if you let
If the numbers say let, LetCompliance runs the let from the advert to the tax return: the advert and applications, referencing, a tenancy agreement for the current law signed online, the deposit and its prescribed information, the move-in pack, rent by Direct Debit, repairs and certificates. Single, for one property, is £7.99 a month, and the 3-day trial needs no card.
- Tick Lender consent to let obtained on the property and add the date it ends: you are reminded before it expires
- Add the mortgage end date and you are reminded 90 and 30 days before the deal ends
- The Valuation page tracks the value, from your own figure or an HM Land Registry House Price Index estimate from what you paid and when, on the trial and paid plans
- Viewings, inspections and inventories happen at the property. If you have moved away, inspections and inventories can be booked as one-off jobs in Crewe, Cheshire, Stoke-on-Trent, Chester, Warrington, Manchester, Liverpool, Wrexham, Derby, Nottingham and Birmingham, and accompanied viewings in a smaller area around Crewe; elsewhere you need a local contact
Common mistakes
- Letting before the lender agrees, which breaks the mortgage terms
- Keeping the home insurance policy on a let property
- Counting the rent against the mortgage alone and leaving out repairs, empty months and tax
- Letting “for a year” and expecting the house back on a date: tenancies since 1 May 2026 have no fixed end
Do I need to tell my mortgage lender if I rent out my house?
Yes. GOV.UK says you must get permission from your mortgage lender before you let. The blog guide on consent to let covers what lenders usually ask.
Can I rent out my house and still get it back to sell?
Yes, but not quickly. Ground 1A lets you seek possession to sell, not within the first 12 months of the tenancy, with 4 months’ notice and a court order if the tenant does not leave. If the sale then falls through, the property cannot be re-let for 12 months.
Do I pay tax on rent from my old home?
Yes, on the profit after allowable expenses, above the £1,000 property allowance, through Self Assessment, and through Making Tax Digital once your qualifying income passes the threshold for that year.
Can I let my house while I live abroad?
Yes. Expect basic rate tax to be taken from the rent under the Non-Resident Landlord Scheme unless HMRC approves you to be paid in full. LetCompliance works from abroad, but someone still has to visit the property.
The honest limits
- This is general information, not financial or tax advice on your own move
- LetCompliance does not arrange mortgages, consent to let or insurance; it records the dates and reminds you
- It is written for lets in England
- The House Price Index estimate is an index figure for the area, not a valuation of your home
