Can i legally rent my house and stay somewhere else for cheap?
Firstly, you will need to consult your mortgage provider. Some will let you port your mortgage to a Buy to Let (assuming you have a low enough LTV), some won’t care, and some will refuse – I’m afraid it’s pot luck. Secondly, you will have tax implications. You will have to pay tax on the rental income, and it is not on the difference between the rent and the mortgage payment, it is between the rental income and the interest payable on the mortgage – which of course changes monthly. You are allowed to rent one room out if you’re still living at the property and you do not need to pay tax on it, however you do need to declare it to the IR.
As long as you have consent from your mortgage provider you can rent your house out and then rent another smaller place. There is no issue for this. An AST Assured Shorthold Tenancy agreement only states that the property be your principal residence, in other words you would need to spend the larger share of the week there and be accountable for bills etc. But in answer to your question yes, you are allowed to do that, in fact its done by quite a few people as they hold a property as an investment or outside of the area or district they live and work in.
