Should we sell our flat or borrow against it to buy a new home?

Q My husband and I owned a flat outright and a home with a mortgage. We decided to sell both to consolidate and trade up. We have now sold our house and have some equity from it – around £105,000 after clearing all other debt. We are having difficulty selling the flat which is valued at £260,000. We currently rent it out for £900 per month. I would like to know it's possible to keep the flat tenanted and borrow against it and what the best approach for this would be and what we could expect to raise. Or is it better to stick with our original plan and consolidate? We are 44 and 50 with a combined income of £110,000 a year before tax. HS A If you stick to your original plan to sell both properties, you'll have more money to put towards your next home. That's because you'll get the full amount of the flat's sale price. You'll get less than that if you choose to borrow against the flat because the most you can borrow with a buy-to-let mortgage is – depending on the lender — between 60% and 85% of the lender's valuation of the property. The amount you can borrow is further limited by the fact that most buy-to-let lenders expect the rental income to cover the monthly mortgage payments by 125% (assuming an interest-only mortgage). So, with rent of £900, the monthly mortgage payment must be no greater than £720. Assuming an interest rate of 5%, that means that you would be able to borrow a maximum of £172,800 on an interest-only basis.