Need advice for arranging my finance to buy a new built house

keeven

I have reserved an off-plan new house in the developer’s pre-launch event. Now the contract has been exchanged. It is extremely off-plan because the building work was just started for the whole development, the marketing suite is not ready yet, and the plot I reserved is expected to completed in the window of April – September 2017.
The developer has been strong, no incentives, no part exchange, no amend of contract, only gave an indicative completion window of 6 months which is not legally binding. It requires to complete within 10 working days once the developer sends the completion notice. Anyway I had to go for it because of the preferred location and the developer has already increased the price twice after the initial pre-launch event, even now it is not formally launched yet.
The new house is 450k, my current house is worth 280k (with 70k mortgage remaining). As the developer does not offer part exchange, I need to sell my current house in order to buy the new one. My question is

• When should I sell my current house?
• How can I get a reliable buyer the secure the transaction?
• Can I manage to live in the current house until the new house is completed?

I’m looking at selling at end of this year in the hope of the price will be over 300k. However since the new house completion date is unknown, if I don’t get ready before the developer sending the completion notice, I will be in big trouble. Hence the buyer must not pull out and the solicitor won’t pick up any issue to cause delay. I assume it might be possible to exchange the contract with the buyer in advance then wait for a few months to complete when I receive the notice for the new house. Obviously most buyers want to complete asap. Not sure if it can work.
Any advice? Thanks a lot!

marksoton

Personally i think you're mad.

But i guess you'd have to sell your current property prior to any potential completion on the new build and rent in the interim.

LateStarter

1. Sell your house as soon as possible - it may take 6 weeks, it may take 9 months.
2. Rent somewhere to live for 6-12 months
3. Wait on developer to complete build.

What's more important to you? The money you'll "lose" by renting, or the peace of mind knowing you can pay for your new house when it's available?

keeven

Looks like I need to take actions now. How about the capital gain tax? Do I need to pay it if the current house is sold 6-12 months earlier than the new house?

dktreesea

You might need bridging finance if you need to complete on your new place before selling your old place. Maybe check with your bank about the likely cost of that.

keeven

Yep, I need to check with my bank. I initially thought it is a long way to go, so kind of sleeping at the moment. I don't prefer to move to a rented house temporarily, too much efforts. And also because my kids are in school, Ideally I want to make only one move in next year.
I wonder if there is any kind of third party company which can do part-exchange like business, or buy my current house and rent it to me for some months?

fashionvictim

keeven wrote: »

However since the new house completion date is unknown, if I don’t get ready before the developer sending the completion notice, I will be in big trouble. Hence the buyer must not pull out and the solicitor won’t pick up any issue to cause delay. I assume it might be possible to exchange the contract with the buyer in advance then wait for a few months to complete when I receive the notice for the new house. Obviously most buyers want to complete asap. Not sure if it can work.
Any advice? Thanks a lot!

This is the same for any new build buy. We have exchanged with our buyers to complete on notice. A lot of buyers will not want to do this as any long gap between exchange and completion is a risk (change of circumstances, mortgage running out, loss of job, change in economy) and no set date for moving.

We are lucky we are selling to someone staying with their parents, so if your place is first time buyer appealing you might have more hope of flex

Personally I think selling now to move in 2017 is waaaay too early unless you go into rented. And your new build might be delayed like mine... 4 months later than the estimated date so far.

Just use the time to make your current house mega appealing and perfect for a quick sale.