Basic questions about selling and moving to an off-plan home

sturgeon

I'm looking to sell my flat and move to another one. I should make around £40-45k profit from the sale, and have around £15k of equity in the property from what I've paid so far, so let's call it £60k in total.

It seems most other new flats these days are sold off-plan and sell out by the time they're actually ready to move into. I'm looking to use the Help to Buy scheme to give me 20% (or up to) for the new property.

I'm sure the developer will need me to exchange if I decide to purchase, although the property won't be ready until Q4 this year.

So the question is, presumably they'll want a 5% or 10% deposit, how do I raise that seeing as I'll still be in my current home? Do I need to put it on the market but delay the sale? Will the help to buy scheme give me that deposit upfront if my property is on the market?

I don't see how anyone can buy a property like this if they currently own one, unless they sell up and live on the streets for 6 months!

Argghhh

one of the eligibility rules is
you must not own any other property anywhere in the world at the time you buy your home supported by the Help to Buy: mortgage guarantee scheme -

not sure if this is at completion or at start of application

Flugelhorn

we have bought houses in the past off plan (well half built ), we had to pay a holding deposit (few hundred pounds) but the actual exchange deposit wasn't payable until the property was actually completed and ready for us to move in to.

sturgeon

Thanks guys.

The full text actually says "The Applicant acknowledges that if they own a residential property that they will sell their interest in that property (or properties) in advance of completing their purchase of the Property with the assistance of a Help to Buy equity loan and that it is a condition of the equity loan that the Property which is the subject of the Help to Buy equity loan will be the only residential property they have any interest in for the duration of the Help to Buy equity loan."

It's for home owners as well as FTB's, so not owning a property would only make it eligible for renters.

Interesting on the small deposit-for some reason I envisage to 'reserve' a property they'd ask for a 10% deposit, which as above I simply can't get without selling my property. You'd think they'd allow a small deposit (£250-500) to reserve it until closer to completion so I'll be checking.

Jon_B_2

You'll have to have an offer on your flat before you can reserve an off plan plot.

Then to exchange contracts it will be known that the equity in your flat is the deposit for your new place.

charlamine

We are going through the same at the moment. We were told we would need a £2000 reservation fee and then in 28 days of paying thr reservation fee would have to exchange contracts where the remainder of the deposit would be due.

Like you all the deposit and reservation fund is tied up In current property so we are selling and renting for 6 months to allow funds to be freed up and ready for reservation and exchange.

It might be different for different building companies though I would imagine