How does renting out my flat work?

[yeahimouttahere]

I'm considering moving somewhere bigger in about 6 months. By that time, I will have approximately £15k equity in my current property. Is it at all possible for me to keep my current flat and rent it out, but using the equity as deposit for my next place?

Not unless you re-mortgaged your current flat to raise a deposit on a new place.

No.

I don't think that enough equity to use. If you find out different let me know as I'd like to do this one day, be careful though as if you remortgage the flat to buy both (if possible) if anything went wrong on either place then both would be repossessed

Could you stay living in your current place longer and save for a deposit on a bigger place? This is what we did, several times and are currently doing it again (not bigger just a different place)

You would need to remorgage the flat as a buy to let, which requires 25% 'deposit' to be left from the equity. You would then need a second deposit for your new property (usually 10% for residential, maybe 5%).

Obviously it depends on property values in your area, but unless your somewhere incredibly cheep, I don't think 15k of equity would cover both.

You need enough savings already to buy a second property along with extra costs of increased taxes for second properties.

You then need enough equity in your property, more than 40% last time I looked to be able to get your mortgage changed over to a BTL.

If you had paid off most of your mortgage it's feasible to remortgage to release capital to cover a deposit on a second place whilst leaving enough equity in your current home to do BTL on it.

BTL is higher risk as in the eyes of the lender it's not guaranteed to be occupied.
It's also more likely to be left uncared for.

Before the new taxes came in it was slightly easier to do but unless I come into a windfall somehow I won't be buying a second property (holiday home in uk) as I had planned to before.

Also don't forget to factor in stamp duty

And that lenders will require a rental income of 125% of your mortgage.

I don't think BTL stacks up economically nowadays, unless you are a cash buyer.

And of course you would have to pay tax on your income & possibly capital gains tax when you sell.