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  • FIRST POST
    • sammorey121
    • By sammorey121 16th Jul 17, 7:04 PM
    • 2Posts
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    sammorey121
    Mortgage Advice
    • #1
    • 16th Jul 17, 7:04 PM
    Mortgage Advice 16th Jul 17 at 7:04 PM
    Hi,

    I own a flat in London which i've tried to sell but the market conditions aren't ideal at the moment - prices dropping due to a buyers marketl. I bought this property 18 months ago in my own name and renovated it, which in doing so increased the market value. I have circa £185k in equity in the flat, value of circa £600k.

    I recently proposed to my girlfriend and we would now like to move out of London. We're going to get married in May 2019. We both earn good money however i've invested a lot in the flat and don't have a lot of cash. We've been trying to work out ways to buy another property given that the market in london is a bit stand still. I've modelled the tax implications of renting out the flat with the new changes coming into force and it basically breaks even on a short term basis. I could take circa £35k out of the flat (if converted to BTL) and my fiance has about £15k cash.

    We could buy somewhere in my fiance's name without issues until May 2019 - one primary residence. Could i gift her £35k? We could also buy another property in both our names, and i could claim back the SDLT if i sell my flat within 3 years. We can borrow a fair bit between us but are limited on cash - given the usual 75% BLT LTV.

    Does anyone know of ways to try and access some of the equity i have in my flat in order to buy a second property that would act as our long term primary residence. I'd rather not buy twice as we'd waste money on SDLT - on the basis of selling my flat within 3 years the CGT issue is minimal, and the income tax issue is not necessarily an issue, plus we can claim back the SDLT overpayment. We'd be looking at buying somewhere in the region of £600k - however i'd need to access circa £85k of the equity within my flat to achieve this.

    Any ideas would be useful. Thanks in advance

    Sam
Page 1
    • ACG
    • By ACG 16th Jul 17, 7:12 PM
    • 15,243 Posts
    • 7,707 Thanks
    ACG
    • #2
    • 16th Jul 17, 7:12 PM
    • #2
    • 16th Jul 17, 7:12 PM
    It sounds like you have thought about the main options. You could gift the deposit to your partner with a couple of lenders but not all lenders would accept it.

    Have you thought about sitting down with a broker to take a look at your individual options?

    Also, what about taking a hit on the equity? I took a £10k hit on a house I sold recently in order to get a quick sale, that was on a property worth £155k.
    I am a Mortgage Adviser
    You should note that this site doesn't check my status as a mortgage adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.
    • minimike2
    • By minimike2 16th Jul 17, 8:19 PM
    • 1,891 Posts
    • 1,393 Thanks
    minimike2
    • #3
    • 16th Jul 17, 8:19 PM
    • #3
    • 16th Jul 17, 8:19 PM
    Just take care whatever you decide to make sure your mortgage broker has every detail of your facts - Thing like the fact you will be gifting a deposit and then living in the property will affect your lender options.
    I am a mortgage industry professional. You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice
    • Thrugelmir
    • By Thrugelmir 16th Jul 17, 9:14 PM
    • 54,866 Posts
    • 47,737 Thanks
    Thrugelmir
    • #4
    • 16th Jul 17, 9:14 PM
    • #4
    • 16th Jul 17, 9:14 PM
    Renovation doesn't always add value. Buyer may decide to rip out your improvements and have a different colour scheme or layout for example. Price the property to sell.
    “ “Bull markets are born on pessimism, grow on skepticism, mature on optimism, and die on euphoria. The time of maximum pessimism is the best time to buy, and the time of maximum optimism is the best time to sell.” Sir John Marks Templeton
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