Buying and renting out a property?

Each country in the UK has slightly different landlord/tenant laws so really depends on what your out of pocket costs will be, but you will never recieve 100% of the rent as income....... you need landlords buildings insurance, maintenance, managing agent fees if you use one and I suggest you do as you don't understand the laws and are a new landlord, so credit/reference checking and a legal contract is priority , if not a full service, register with an insurance deposit scheme ( some countries in the UK you pay an annual fee, some you don't) annual gas checks and certifiction ( if any gas in the property) from 1 April 5yrly electric checks and certification, some countries the landlord pays for the CT, others the tenant pays, you can claim these as a tax deduction along with the reciepts ..... you have to register with HRMC and file annual taxes regardless of how much or little rent you earn....as far as your tax free personal allowance of £12,500, rent payment forms part of your total income, income from renting a home is not separate..... and know that being a landlord is not a money making tree,  new laws are always coming in , always costing the landlord more and if you get a bad tenant who fails to pay rent, getting them out with legal costs can wipe out 1-2 yrs of income, income you will not get back....and you have your capital tied up in a property, gone are the days of selling a second home without paying huge amounts of tax

The rent would be TAXABLE INCOME, with or without a mortgage.

The £12,500 number is irrelevant. The rent is added to ALL of your other income for tax purposes.

If you sold the house and invested the money, you would make some sort of return.  Let's say 8%.  This is taxable.

Can you do better than 8% if you rent?  Calculate rental income and subtract all expenses (utilities, insurance, repairs, etc.).  Does this net amount exceed 8% of the sales price?  If so, renting beats investing.