Sell and buy or sell, rent then buy??

Pennypanj

Hi,
Next year I want to sell and move house. The area that we want to move to is expensive and houses in our price bracket don't come up that often,.but.they do..my questions are.. if there is nothing available at the time when we sell for us to buy immediately, how.would renting affect our mortgage lending ability when the ideal eventually does come available? Are there any benefits to renting between purchases? Are you classed as a first time buyer again? As I'm 43.do I need to buy again as quickly as possible in order to get another mortgage?
Any advice would be very welcome.
Many thanks
X

bigfreddiel

I've always bought and then sold, won't be doing that anymore because of the 3% extra stamp duty so it will be sell rent buy from now on

Cheers fj

Pennypanj

So you don't pay.extra stamp duty if you are a first time buyer? That's definitly an advantage of renting in between purchases then! Thanks!

LittleMax

The extra stamp duty is on second homes, so only applies if you don't sell you existing house before buying another. If you bought and sold in the traditional way in a chain on the same day you would not pay the extra stamp duty.

Chanes

We sold and bought at the same time. We will never do that again. If we move again we will sell and then rent and take our time looking before buying, the process in selling and buying at the same time with all the associated hassles of each...never again!

Thanetia

If you have a current mortgage that can be ported to a new property, you may lose this when you sell.
If property prices are moving swiftly in your area, you will lose out on any gain/loss for the period you are renting.
Renting gives you the flexibility to take your time to find the right property, and you can sell yourself as ready to move to any propective seller.
Renting means two sets of removals but you can declutter properly before you go into rental, and the second move becomes easier due to having done it recently. You can leave stuff packed up if only planning to rent short term (although most tenancies will be min 6 month).
Depends on your circcumstances. We did it when relocating 150 miles and ended up renting for aroud 18 months before the right house came up. But market was pretty flat at the time. Also allowed us to reaally understand the area and we ended up buying somewhere we wouldn't have looked at without the local knowledge gained by being in the new location.

AlexMac

Too many variables to generalise;
a simple buy/sell is the norm, and avoids the newly added 3% on second purchases (which will add £10k+ to costs on a £350k purchase, unless there's a get-out in the small print for fast-sequenced rent/sell/buy), but...
having cash in the bank puts you in a stronger position in a sellers market, alternatively...
in a fast-accelerating local market, 6-12 months could see prices rise by much more (or less) than the 6%p.a. ONS UK estimate of 6% to Sept 2015 ( http://www.ons.gov.uk/ons/rel/hpi/house-price-index/september-2015/stb-hpi-september-2015.html ) - in my street its probably between 10-15% this year, whereas it's 1% in some regions (so put another way, prices could go up anything from a couple of grand to £50k in a year... or drop in the unlikely event of a wobble)

So... d'ya feel lucky punk?

nubbins

I agree with the above, it depends on the area and current market. A half decent 3 bed semi in my area has risen approx 3k a month this year, being in rented for 6 months to a year would have cost 20-30k on top of losing a years worth of chipping away at the mortgage. Unfortunately you are in a chicken and egg situation, if you put your property on the market and get a buyer you will not find anything suitable to move to and if you don't put your property on the market, your dream home will come up and you will not be in a proceedable position, its hard and you have to have a bit of luck.

HappyMJ

I would rent, sell and then buy or buy and sell.

Selling and buying on the same day is far too stressful. You need to completely empty your house of everything into a large van returning the house keys to the agent. Then wait for the phone call telling you the house sale has completed successfully and the house purchase has completed successfully then you can start moving your stuff into the new house.

When moving between rentals there's usually a week or more overlap and you can move in as and when you have the time. You don't need to hire a large van which you may or not be able to drive on your licence so may need to hire a driver. A small self drive van for one day will do for the big things and you can carry out several trips over the week in the car. You can spend time cleaning the new property before moving anything in and you can spend time cleaning the old property before handing in the keys.

However, moving does affect your credit rating but that affect usually wears off after 6 months which is the minimum term of a rental property.

I would hope the new stamp duty rules would allow people to buy a house first which would be considered a second property and then sell the old house over the next year or two without having to pay additional stamp duty.

Azure11

I think people might be confusing the OP by mentioning about the extra 3% - s/he hasn't mentioned anything about buying before selling so surely this isn't an issue?
If I were you I would wait until you get a buyer for your property and then give yourselves a couple of weeks (assuming your buyers agree) to find a property to buy. if you can't find one then look for a rental. But as others have said you run the risk of prices increasing in your area and being priced down in that likely at least 6 months - if the area is expensive then even a small rise could mean you have lost buying power in that time. And also as someone mentioned the additional costs of renting including moving twice and the money spent on the rental. It's all a gamble!

ETA as long as your situation hasn't changed in terms of mortgage eligibility then surely you should be OK getting a new mortgage. If however, you have maybe moved jobs recently etc or have had some kind of other significant change then it may be better to take your existing mortgage and buy/sell at the same time?