Mortgaging current residence in order to let it

[infracom]

I own a house in London in which I have lived for the last nineteen years. Value is about £700k. I paid off most of the mortgage some time back and owe about £10K. I could pay this off at any time if I wanted to. I would like to let the present house and move to another town. The rental income from the house would be at least £4000 per month judging by rents from similar properties in my area. But I would need to do maintenance and decoration on the present house before letting it, cost about £80K. I could raise this without too much trouble from savings and selling ISAs but this would almost exhaust my savings.

1. Assuming I stop living in my present house and let it, is it likely I would be able to get a buy-to-let type mortgage on the present house to do the maintenance and provide some cash, say a mortgage of 50% of valuation.

2. If I could what would be the tax position on the rental income and the mortgage interest payments given that I would no longer be living there?.

[snorkerz]

You should be able to get a BTL mortgage at 50%LTV

You would be able to claim a tax allowance against your rental income on the mortgage interest.

The repairs you would carry out before your first tenant moves in would not be allowable against income - but may (iirc) be used to offset CGT.

Personally, I would get an accountant involved. Fees in the provinces to handle a simple single-property business are around £200pa - lets double that to £400 in your case - probably still worthwhile.