Becoming an accidental landlord, keeping a property when you move, inherit, or upgrade, feels like a low-risk way to keep your options open. This tool compares the net proceeds of selling now against the cumulative rental cash flow plus a future, tax-adjusted sale, so you can see whether "keep it and see" actually stacks up financially over your chosen time horizon.
How this calculation works
The sell-now side is a direct calculation: current market value, minus the estate agent fee, minus legal costs, minus your remaining mortgage balance, giving your net cash proceeds today. The rent side is more involved: it calculates your annual rental income, deducts a letting/management fee, other running costs (maintenance, insurance, an allowance for void periods), and mortgage interest, taxes the resulting profit using Section 24 rules (finance costs are not deducted from taxable profit; instead you receive a 20% tax credit on the interest paid), and accumulates that after-tax cash flow every year of your horizon. At the end of the horizon, it also calculates the net proceeds of an eventual sale, including an estimated capital gains tax bill on the accumulated gain since original purchase, at your marginal rate.
This tool applies a flat estimate based on your marginal income tax rate and doesn't model your annual CGT-free allowance, any Private Residence Relief you might be entitled to for a period you lived in the property, or the specific current CGT rates for residential property (which differ from other assets). See our Property Tax Timeline for the full detail on current CGT rules, and treat the figure here as an illustrative estimate rather than a precise tax calculation.
What tends to tip the decision either way
- Your mortgage rate relative to achievable rent. A property with a low mortgage rate relative to rent tends to generate a genuine surplus; a highly geared property on a higher rate can be cash-flow negative even before tax, in which case renting is effectively subsidising a bet on future price growth alone.
- Your marginal tax rate. Because Section 24 taxes gross rental income for individual landlords, a higher-rate taxpayer feels the tax bite far more heavily than a basic-rate taxpayer with the identical property and rent.
- How much of the eventual gain will be taxed. A property that was once your main home may benefit from Private Residence Relief for part of the gain, meaningfully changing the future sale figure in ways this simplified tool doesn't capture; that specific calculation is genuinely worth a proper accountant's input before committing to a "rent it out" plan.
Before any of these numbers become relevant, confirm with your existing mortgage lender whether letting the property is even permitted under your current residential mortgage, most require formal consent to let or a remortgage onto a buy-to-let product, and using either without permission can breach your mortgage terms.
Frequently asked questions
Does this tool include Private Residence Relief?
No, this simplified version applies a flat capital gains tax estimate on the whole gain at your marginal rate. If the property was ever your main home, you may be entitled to Private Residence Relief covering part of the gain, which would improve the rent-and-sell-later figure; get a proper calculation from an accountant for your specific situation.
Do I need my lender's permission to rent out my current home?
Almost always, yes. Most residential mortgages require either formal consent to let or a remortgage onto a buy-to-let product before you can legally rent the property out. Confirm this with your lender before making any decision based on the figures in this tool.
Why does this tool ask for my marginal tax rate rather than assuming a flat rate?
Since Section 24 restricts mortgage interest relief to a 20% credit rather than a full deduction, the actual tax impact of renting out a property depends heavily on whether you're a basic-rate, higher-rate, or additional-rate taxpayer; using your own marginal rate gives a far more accurate result than a generic assumption.
Continue your research
About the author
✓ Editorially reviewed — all Poqet guides are checked for factual accuracy before publication and updated when UK rates or legislation change. Editorial Policy