Can't sell..want to downsize. buy to let?

ecclescake

Hi
Up until Christmas we had our house on the market for nearly 2 years. We reduced price, had loads of viewings but nothing. It is a big house and we really want to downsize. We have a mortgage that is 25% of its value. We both have perm full time jobs.
We also have 1 buy to let property.
We are considering buying the downsize house that we want while prices are cheap, adding to our current house mortgage for the deposit on a BTL mortgage and renting it out. We will then put this bigger house on the market again.
When we manage to sell our house we will then move into the BTL and pay everything off...
What do people think? Does anyone have any other ideas?
We considered renting out our current house to cover the payments of the small house but we have done loads of work to it, including extending upstairs, it is new and fresh. we worry renting may add a lot of wear to it.

lessonlearned

If house number 3 is your "dream house", and you don't want to lose it then your idea has legs. Do your sums and if you can afford it why not.

You are no stranger to BTL and know the score.

I agree it is better to remain in your principle residence until it is sold so that you can be sure that is well looked after and "sale ready".

The two years on the market is rather worrying. Time to change tactics perhaps???

happycamel_2

Check the CGT implications if the large house won't count as your principle private residence when you sell

Yorkie1

I may have misunderstood, but is the situation as follows:

House A - large, currently your private residence;
House B - currently rented out (no plans to change this)
House C - smaller than house A, to be bought.

You plan to buy house C on a BTL mortgage, rent it out to tenants, stay living in house A with it still on the market until it sells, and then move into house C.

Is that right?

If so, how do you plan to tie in the dates of your sale of house A, with evicting tenants from house C - particularly if they are part way through a fixed term or refuse to leave until a court order is sought?

You'd presumably have to get a new mortgage on house C as soon as you moved into it, because it is no longer a BTL.

Sounds rather over-complicated to me.

Thrugelmir

Keep reducing the property price until it sells.

Renting it out isn't going to make it easier to sell. If anything more difficult. As the tenants will have rights. So the property would be empty for some time. Meaning you would be paying a mortgage with no income to offset the cost.

lessonlearned

Thrugelmir wrote: »

Keep reducing the property price until it sells.

Renting it out isn't going to make it easier to sell. If anything more difficult. As the tenants will have rights. So the property would be empty for some time. Meaning you would be paying a mortgage with no income to offset the cost.

OP has no intention of letting out the primary residence - do pay attention at the back.:rotfl:

Provided that your primary residence remains your primary residence and is not let out there should be no CGT implications.

When house no 1 is finally sold then house No 3 then becomes your primary residence. Again there should be no CGT due. Double check this of course but that is my understanding of CGT rules as they stand at present.

Isn't this what the MP's got their wrists slapped for. In their case it was abuse of expenses and tax payers money. The actual "flipping" was perfectly legal but because they were using public money to fund their purchases it was morally reprehensible.

You will be doing nothing illegal or immoral.

My opinion on this is why sell at a loss if you don't have to. If you have sufficient moneys to fund an additional purchase and can afford to play the long game then do so and wait for market conditions to improve before you sell your primary residence.

Take it off the market and wait......

It is not complicated and perfectly do-able.