If you are a buy-to-let landlord, you may experience rental income problems this year. 

If your tenant is unable to pay their rent you should speak to your tenant and follow the emergency government guideline procedures on tenancies.

If you have a buy-to-let mortgage and are worried about making payments, speak to your lender about payment holiday options related to the Coronavirus disruption. 

If you are using a property to help you with your income in retirement, you may also be considering your options especially if you are unable to extend your buy-to-let mortgage past a certain date in the future. 

You may not wish to sell the property, you may have a large unreleased capital gain to pay on the sale proceeds.

Those over 55 may therefore be eligible to release a tax-free lump sum from their buy-to-let property. 

You can still use the property as a buy-to-let investment and the loan will sit as a first charge on the property until you either sell or pass away in the future. 

You can choose to pay the interest on the loan or it can be rolled up (compounded) over time. Some lenders may also allow you to repay the entire loan penalty free after a certain number of years have elapsed. The interest rate is typically fixed for the loan’s lifetime. 

  • You will therefore continue to own the property during your own lifetime. 
  • The money released from the equity release exercise is tax-free.

We always deal with lenders who are members of the Equity Release Council (ERC); their products will come with a ‘no negative equity guarantee’; this means that applicants will never owe more than the value of the property.

This is a big decision so you should instruct legal independent financial and legal advice on the matter. We can help you identify the potential risks with this exercise such as:

  • How entitlement to state benefits might be affected by taking out a lifetime mortgage.
  • The equity in your property will reduce by the size of the outstanding loan. 
  • A lifetime mortgage could end up being more expensive than selling your property in the long run.

We are here to support you during these unprecedented times. If you have any queries or need any advice, please do not hesitate to contact me.

By Simon Lake, Chartered Financial Planner 


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

We offer all enquiries a free initial consultation where we can explore your objectives and your needs. 

Thomas Westcott Chartered Financial Planners is authorised and regulated to provide independent advice on equity release mortgages, for a main residence and second homes.