Blog / Landlords | 12 Mins Read

What’s the Process for Inheriting a House & Renting It Out?

Name: What’s the Process for Inheriting a House & Renting It Out?
Brand: Progressive Lets
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By Wayne Beecham | Created on 2nd February 2026

Around a third of us expect to inherit a house, often from a parent or close family member. Dealing with the legal aspects of an inheritance once a loved one has passed away is difficult, emotionally and practically.

But understanding both the legal process and your options can help you to plan your next steps. You may decide to put the property on the market to sell it or, like many people who inherit property in Peterborough, you may consider renting the property out.

With a large student population, a strong local job market and a commute time into London of less than one hour, there is a high level of demand for rental properties in Peterborough.

The average monthly rent in Peterborough was £972 in December 2025. So, there is great potential for generating a good passive income by renting an inherited property in areas such as Peterborough, Spalding, Northampton, Rushden and Wellingborough.

Becoming a landlord will mean following some additional processes and taking on new responsibilities, so read on to find out some of the key things to think about if you’ve inherited property in Peterborough.

Your Options When Inheriting A Property

Weighing up what to do with a childhood home is tricky, but you need to think practically. You have three main options when inheriting a property – to sell the home you’ve inherited, hang onto it and rent it out to tenants, or keep it and live there yourself.

Here are some of the points you need to consider, when choosing between the options available:

Moving Into the Property – If you inherit a house with a mortgage, can you meet the payments? And if you’ve inherited with siblings, do you all agree on the course of action?

Selling The Property On – If you sell or rent out the house, you should remove personal belongings and may need to modernise or refurbish it to attract buyers. You must also be aware of any tax that may be due. Contact local estate agents about the local sales market for properties such as yours.

Renting Out The Property – Is there a good rental market for this type of property? Rental yields can be good in Peterborough, but speak to local letting agents about the rental market for properties like yours. You will need to clear out personal possessions and get to grips with life as an accidental landlord, like how to furnish your rental property. This includes modernising to meet current rental standards, arranging safety inspections and the day-to-day running.

Process To Follow When You Inherit Property

Probate is the application process you must follow to obtain the legal right to deal with a deceased individual’s estate, which includes all of their assets. Prepare for the process to take several months.

Until you have been granted probate, you won’t be able to sell the property. However, you may be able to rent it out if the executors of the estate all agree.

1. Consult The Will

If the deceased person left a will, this should name the executors (a friend, relative or possibly their solicitor). Without a will to go on, you’ll need to apply for probate, or a grant of representation.

2. Apply For Probate

There are two methods of applying for probate – you can apply through the gov.uk website, or appoint a solicitor to apply on your behalf. It is relatively straightforward to apply yourself, but some people’s assets are complex and there can be tension and conflict within the family. In these cases, instructing a solicitor is usually the best course of action as it will ease the overall burden on you.

3. Follow The Process

During the legal process of probate, you need to organise and gather all the information about the deceased’s assets. From there, pay any bills outstanding and tax due, then allocate the remaining portion of the estate.

The will typically outlines what each beneficiary will receive, but if the person died intestate (leaving no will) the estate will be shared according to a predetermined formula.

4. Transfer Of Ownership

The executor has to submit property transfer forms to Land Registry during probate. Keep in mind that you won’t own the property until probate is complete.

Renting out inherited property

Renting out an inherited property can provide you with regular income that you can use to build your retirement funds.

When there is an emotional attachment to the property, you might want to take some time to reflect on the decision, especially if you have just lost a loved one.

If you are not sure whether you want to sell the property, you could rent it out for a short period to give you more time to consider the pros and cons of selling vs renting out.

Alternatively, you might already be thinking about the long-term benefits of renting the property out. Letting the property over a longer period will not only generate regular income, but there is also a good chance that the property will grow in value. In the last ten years, average property prices in the City of Peterborough increased from £157,637 to £231,412.

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If you decide to go ahead with renting your inherited property out, these are some of steps to take:

Completion of probate – Before you rent the property out, probate must be completed so that ownership is legally transferred. In the scenario where you are one of two or more beneficiaries, you will need to jointly agree whether to sell or rent the property out.
Check you have permission to rent – You will need to check that you are allowed to rent the property out if it is a leasehold property. Some areas of Peterborough also have selective licensing schemes, so you should check the local authority website to find out whether you need to apply for a selective licence. If the property has an equity release or a lifetime mortgage, you will need to settle the debt before you are able to rent the property out. If you do not have the funds to do so, your only option may be to sell.
Decide how you want the property to be managed – You can either manage the property yourself or use a letting agent to undertake the management responsibilities. Managing a rental property is time-consuming and landlords have lots of legal responsibilities to comply with, so many accidental landlords opt to use an agent to manage the property. Talk to a local estate agent to find out about the services they offer and costs involved. They will also be able to provide you with information about the local rental market and recommend a rental price based on what is fair and in line with average rents in the area.
Take out a buy-to-let mortgage (if required) – If there is an outstanding mortgage on the property, you will usually need to take out a buy-to-let mortgage for the remainder of the loan.
Arrange insurance – As well as getting buildings insurance, landlords generally take out additional insurance cover such as public liability insurance and content insurance for furnished properties. Some landlords also prefer to have the financial security of taking out loss of rent insurance.
Preparing for let – Before you arrange marketing photos and viewings, you should clear items, ensure the property is clean and tidy, and see to any issues like repairs or maintenance to present the property at its best.

Tax & Inherited Property

Beneficiaries often find themselves paying tax after inheriting a house, but the taxes you’re liable for depend on its value and your future plans. So, do I pay stamp duty on an inherited house? The answer is no, but there may be other tax implications.

Read on to find out when you have to pay inheritance tax, income tax or capital gains tax on an inherited property. Here’s an outline of what to expect, but always consult a financial specialist.

Inheritance Tax

If the estate is worth more than £325,000, then by law you must pay inheritance tax on the amount over this at a rate of 40%. However, if the deceased’s children or grandchildren inherit the estate then the tax threshold is set higher at £500,000. No inheritance tax on a house or other assets is due if the estate passes to a spouse or civil partner.

A person’s estate includes all of their personal assets including cash, valuables, such as artwork or cars, as well as the house.

You must pay the inheritance tax owed within six months of the person’s death, or HMRC will charge you interest. You can claim back the amount from the deceased’s estate once probate has been granted. For more information about inheritance tax obligations, visit the gov.uk website.

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Capital Gains Tax And Inherited Property

You won’t immediately pay capital gains tax (CGT) on an inherited property. But while you may not need to pay capital gains tax when you inherit a property from your parents, you may need to pay CGT on any increased value while you’ve owned it when selling an inherited property in the future. You can offset specific costs against CGT and there is a tax-free allowance before you cross the threshold.

Income Tax And Inherited Property

If you are inheriting a property and decide to rent it to tenants, then you will be liable to pay income tax on any earnings you receive. To do this, you must register yourself for self-assessment with HMRC and fill out and submit an annual tax return form.

Common questions about inheriting a property

What happens if I inherit a property with siblings?

If you inherit a house from your parents but it is left jointly to share with one or more siblings, you must decide together whether to sell the property, rent it out or if one sibling will buy out another’s share.
–Selling or keeping? – Selling allows you to allocate the proceeds neatly. Alternatively, you can keep the property as joint tenants (everyone is an equal owner), or tenants in common (each holds a share in the property).
–Buying a sibling out? – If one of you wishes to live in the property, you will have to consider buying a sibling out of the inherited house, or agree on another arrangement.
-Problems of inheriting a house with siblings: Tensions can rise when you’re inheriting a house with siblings, for example, you intend to sell the property but your sibling doesn’t want to. When one brother or sister doesn’t have the funds to buy the other out, it might be possible to force through a sale by obtaining a county court judgement. You must seek expert legal advice before going down this route.

How do I handle home insurance on a newly inherited property?

Let the insurance company know that you are the new owner of the property, or that it is going through probate. Most insurance policies have clauses about leaving the property unoccupied for a certain length of time – often 30 days. This is because there is a greater risk of accidental damage theft and vandalism when a property lies unoccupied. So, you may need to change your policy or take out a new on

What Can I do If There Is A Mortgage On The Inherited Property?

You can inherit a house with a mortgage on the property – but contact the lender as soon as possible to freeze mortgage payments until probate is granted. Here are a few possible ways to handle an inherited property with a mortgage:

–Life Insurance – If there’s a life insurance policy, this may cover the remainder of the mortgage contact.
–Pay Off The Debt – The deceased’s other assets may cover the debt on the house.
–Sell The House – You will pay off the mortgage and keep the balance, but to hold onto the property, you will have to pay the outstanding debt.
–Take on the mortgage – You can stay with the current lender or find a different provider, but you must pass affordability and credit checks. If you plan to rent out the property, you need to move the mortgage to a buy-to-let product.

Are You Still Considered a First-Time Buyer If You Inherit Property?

You’re no longer classed as a first-time buyer once you inherit a property or a share in one. This means you won’t qualify for the first-time buyer’s rate on Stamp Duty Land Tax (SLDT) if you move to a new property. If you buy another property while retaining the inherited home, you may be liable for the second home surcharge.

Find Out More

If you have inherited a house in the Peterborough area or across Northamptonshire and Cambridgeshire, and are looking at your options, then speak to our professional team. If you decide to hold onto the property and rent it out, we’d be happy to help you with any aspect of letting your home.

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Wayne Beecham

Wayne is East Midland’s answer to property management. His hard work and high standards of service have gained him a fierce reputation within the regional lettings market. He knows what it takes to own and manage a profitable portfolio himself, because he is not only a successful investor and landlord, but co-founder and “hands on” managing director of Progressive Lets.

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