Tennant in property until Oct - can we still buy house now?

HokkaHokkaTei

Hello
We are in a position where we have fairly rapidly outgrown our 2 bed house (2 kids in quick succession) and have been forced to move in my Mums place temporarily as there is more room.
We have a tennant in the property at the moment (contract runs out 1st Oct)
Hypothetically, if we saw a property on the market now that we really liked could we make a move for it on the understanding that we will immediately put our house on the market asap or would we need to wait until nearer the time that our tennants contract is expiring?
Here's a bit more info...
Our property is worth approx £188k and we have around £150k left to pay on the mortgage.
Our current fixed rate expires in June.
I am currently earning £24k per annum before over time. My partner is a stay at home Mum at present.
We have £88k in savings to invest on a new property.
I would like to stick to a budget of around £235k or under for the next property.
If anyone has any feedback or recommendations I would be really grateful.

Many Thanks in advance.

Chris (PS on a side note, does anyone have a professional opinions on whether house prices are likely to drop or rise this year in general - I live in a commuter village in Essex)

TrickyDicky

Most people wont buy without vacant possesion. Come the end of the tennancy, the tennants may simply refuse to leave. The only people interested will be buy to let investors, severely limiting your market.

HokkaHokkaTei

Thanks for you comment
I'm not looking to put our current house on market yet, only closer to when tennants contract expires.
If we saw a house that we loved in the meantime, is there any way we could make an offer/complete the transaction under the understanding that we put our other house on the market later in the year?
Chris

rsykes2000

HokkaHokkaTei wrote: »

If we saw a house that we loved in the meantime, is there any way we could make an offer/complete the transaction under the understanding that we put our other house on the market later in the year?
Chris

Possibly, but only if your salaries will support the multiples asked for by the bank for 2 mortgages. Do you earn enough for 2 mortgages ?

Spangled

One point to consider is this: how will you fund a £150k mortgage on a single salary of £24k? That's a 6x salary multiple which is virtually impossible to obtain these days. To get a bank to give you a £150k mortgage, you'd probably need to have an income of at least £40k.

RufusA

The devil is in the detail of the Assured Shorthold Tenancy terms. Check the agreement carefully as there may be a break clause, and there may also be limitations on being able to market / sell the property during the tenancy.

You may be able to buy / sell your house and exchange contracts on the new place in the next few months on the understanding that you won't complete until Oct. BUT it's risky and I doubt many sellers would be keen to entertain the idea.

With a chunk in savings for a reasonable deposit assuming the rent fully covers the mortgage and some, then you might be eligible for a Let to Buy mortgage scheme or similar. However without the equity from your existing property it's going to be a struggle to get a large enough mortgage for a 235k house with your income, unless your overtime is dependable and can be taken part in to account!

I think you need to speak with a specialist whole of market mortgage advisor and see what options are available to you.

As to house prices - given the uncertain political situation it's impossible to predict! There are too many competing pressures, rising inflation, rising unemployment, low interest rates to name three.

Rufus.

Yorkie1

If you look on the Landlord Zone website, there are numerous stories of tenants refusing, or not being able to, move out at the end of the tenancy. It then takes several months to evict them (and no guarantees re the condition of the house at the end of the tenancy).

The probability of this occurring is likely to be low, but if you exchange before October, with completion in October after expiry of the tenancy, and the tenants refuse to move - then you will be liable for significant costs for failure to complete. The risk is yours to judge for yourself, but you really need to consider whether this is a gamble worth taking - I'd personally want to wait until I knew I had vacant possession.

RufusA

Yorkie1 wrote: »

I'd personally want to wait until I knew I had vacant possession.

+1

Rufus.