Can you rent out your Help to Buy home?

If you bought your home using Help to Buy: Equity Loan in England, you cannot normally rent out the entire property while the equity loan remains outstanding. Homes England may allow temporary subletting if your circumstances make it difficult to live there. If you want to move to a buy-to-let mortgage, you must repay the equity loan in full first.

This guide covers England’s Help to Buy equity loan, not Help to Buy schemes elsewhere in the UK. The scheme is closed to new applications, but existing borrowers still need to follow its rules. This is general guidance, not personal financial or legal advice. For background on the earlier 2013 to 2021 scheme, see Homes England’s homebuyers’ guide.

Related guides:

• Help to Buy remortgage and equity-loan repayment, for the repayment process and mortgage considerations.
• Help to Buy (Equity Loan) for first-time buyers, for how the scheme works.

When might Homes England allow temporary letting?

Homes England calls letting your entire home to someone else while you live elsewhere subletting. Its guidance on subletting says temporary permission may be possible if you need to move because of:

• Ill health or a need to care for a family member.
• A change of work location that would make your commute unreasonable.
• Financial difficulties, such as job loss, reduced household income or a change that makes mortgage payments unaffordable.
• Unsafe cladding that requires a temporary move or causes financial difficulties.

These circumstances do not guarantee approval. Contact the Help to Buy Customer Service team before agreeing to let the property. Your mortgage lender’s consent alone is not enough: Homes England must also approve subletting under the equity loan terms.

What will you need to apply?

Homes England asks for:

• A letter from your mortgage lender confirming that it will allow you to sublet the entire home and will not change your repayment mortgage to a buy-to-let mortgage.
• A letter from your building or contents insurer confirming that it will allow the subletting.
• A covering letter explaining why you want to sublet and what you plan to do after 12 months.
• Any other supporting evidence it requests. If you are applying because of unsafe cladding, its guidance specifies additional evidence, such as an appropriate EWS1 form or evidence from your freeholder or management company.

The administration fee is £50. Homes England says permission lasts 12 months. Before subletting, settle outstanding equity-loan payments or agree a payment plan with its Customer Service team. Continue paying the management fee and any equity-loan interest due until the loan is repaid in full.

At the end of the permitted period, you must move back, obtain permission to sublet again, or repay the equity loan in full. If you want to renew, ask at least one month before your permission expires; do not assume renewal is automatic.

Can you have a lodger instead?

Homes England says you may have one lodger without asking it for permission, provided you live in the home at the same time and do not grant the lodger a formal lease or tenancy giving them an interest in the property.

This is an exception to Homes England’s permission requirement, not blanket approval from your mortgage lender, insurer, freeholder or lease. Check their terms before taking someone in.

What about Airbnb or short holiday bookings? Do not assume they qualify as having a lodger: Homes England’s published lodger exception does not expressly address short-term holiday guests. Ask the Customer Service team about your proposed arrangement before accepting bookings, and check your lender’s and insurer’s requirements separately.

What if you want to rent out the home permanently?

Temporary subletting permission is not a permanent route to letting. Homes England says you cannot change your repayment mortgage to a buy-to-let mortgage until you have repaid the equity loan in full. Paying back only part of the equity loan does not remove that restriction. Nor does merely changing your mortgage deal: the equity loan must actually be redeemed in full before the buy-to-let switch.

A remortgage might provide the funds to repay the equity loan, but the lender must be willing to lend the amount and approve your intended use of the property. Discuss the sequence of repayment, mortgage completion and any letting with your adviser and conveyancer before making commitments to tenants. Full repayment does not, by itself, override mortgage terms, insurance conditions or any lease restrictions.

How much might full repayment cost?

The equity-loan principal you repay is based on the remaining equity-loan percentage and the home’s market value at the time of repayment. For illustration, if you still owe 20% and the accepted market valuation is £300,000, the equity-loan principal would be £60,000. Outstanding interest, fees and arrears are additional. Your actual redemption figure comes from the formal process, not this example.

Homes England requires a valuation that meets its Royal Institution of Chartered Surveyors (RICS) criteria; it does not accept a valuation prepared for bank or mortgage purposes. You must also instruct a conveyancer and follow its repayment application process. Allow time for the valuation and legal work before planning a mortgage or letting date.

Compare the full costs, including:

• The new mortgage’s interest rate, repayments and overall borrowing cost.
• Any early repayment charge on your existing mortgage.
• RICS valuation and conveyancing fees.
• Mortgage and broker fees, where applicable.
• Homes England’s £200 equity-loan repayment administration fee.

Funding repayment with a mortgage replaces equity-loan debt with mortgage borrowing; it does not make the debt disappear or guarantee lower costs. Read Homes England’s guidance on repaying an equity loan when remortgaging for the current process and requirements.

What if you have already let your home without permission?

Contact the Help to Buy Customer Service team promptly. Homes England allows you to apply retrospectively, but approval is not guaranteed. It says you will need to pay the £50 administration fee and any costs associated with breaking the rules.

If it refuses retrospective permission, Homes England says you have six months to move back, sell the home or repay the equity loan in full. It may tell your mortgage lender and consider enforcement action, including repossession. Your lender may also take action under your mortgage terms. Seek independent legal and financial advice if you are in this position.

Who should you contact?

For Help to Buy subletting permission, email customerservices@myhelptobuyloan.co.uk or call 0300 123 4123. Homes England asks you to include your account number and a brief summary of the query, such as “Sublet”, in the email subject line.

A mortgage adviser can discuss borrowing options for your circumstances; a conveyancer can advise on the legal steps.

Your home may be repossessed if you do not keep up repayments on your mortgage.

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