Relocating to Oz, what to do with HTB Property?

darkvader

Been a while since I posted on here which is mainly because we have been working through all the formalities to move over to Melbourne. Having bought a HTB property few years back, we have been on the market for 5 months and not sure what options other than waiting for ever to sell our home, close the mortgage, pay the govt, get our deposit and then move out. A quick summary below of our situation

1. Property purchased in 2014 using 20% Help to Buy Scheme
2. Property put on the market for sale June 2016, still waiting for an offer
3. Rule says we cannot rent it out and have to sell if not used as main home of residence

We have to land in Australia by Dec 25th, thats the condition of our visa. If we dont sell and move we will have to go there for a short holiday, return to the UK and continue waiting for the sale before our final move.

Does anyone know what other options we can investigate?

1. Has anyone rented or knows of anyone who rented their HTB property?
2. As our fix mortgage ends in Mar 2017, we were thinking of re-mortgaging, paying the govt 20% back and converting into a buy to let property. Does anyone know if brokers would help with such a mix of things we need to do?


Our property is in a good area and well maintained, the Brexit hasnt helped and the market is generally slower now than April/May. I would rather we sell and move but since demand for rental is high it may be a good idea to rent it out for a few years but it isnt easy thanks to the rules of the 20% HTB scheme

Any suggestions or advice would really help us plan next steps

Thanks
DV

vqmismatch

Sounds like you may have to reduce the price.

darkvader

vqmismatch wrote: »

Sounds like you may have to reduce the price.

Done already, actually marketing below fair price and the RICS survey report will probably show a higher price than what we have marketed for.

Important to note that the govt will ask us to pay at the higher of the RICS survey and sale price. For example, if the survey says £300k and I sell for £270k, the govt will ask 20% back from £300k, so there is a limit to how low I can sell our property for

DV

Cakeguts

Was it new when you bought it? New properties have a premium on the them so you might not have made up the difference in price now that it is not new. If you haven't had any offers that is because your price is too high and people don't want to offer what the house is worth to them. To sell it you will have to reduce the price.

Cakeguts

How do you know what the fair price is? A house is worth what someone will pay for it. It isn't worth what you think is a fair price or the valuation made by an estate agent it is only worth what someone else will pay for it.

darkvader

Cakeguts wrote: »

Was it new when you bought it? New properties have a premium on the them so you might not have made up the difference in price now that it is not new. If you haven't had any offers that is because your price is too high and people don't want to offer what the house is worth to them. To sell it you will have to reduce the price.

Yes, it was brand new but other properties have sold in Apr/May this year for higher, there are some properties under offer in the same region so I am certain the price is right. Also, I am not asking for advice on the price to sell for

I am looking for options OTHER than selling, so renting it out while purchased through HTB, how the remortgage works in that case etc. If anyone has gone through this option or perhaps know of someone who has then learnings from that would help us


Thanks
DV

darkvader

Cakeguts wrote: »

How do you know what the fair price is? A house is worth what someone will pay for it. It isn't worth what you think is a fair price or the valuation made by an estate agent it is only worth what someone else will pay for it.

RICS Survey, previously sold properties in the area and to an extent, the estate agent (but we all know better than using their view as Gospel truth)

Agree, it's worth what someone pays for it. We've had viewings and no one has said it is marketed at a higher price, as we were open to lower offers too. This is why I am looking at renting because the rental market is quite good in our area

DV

Arlo

We have just sold our new build for 10k under what we paid new, purchased begfining of 2015.
Sounds like you are going to have to drop the price more, we had to drop £20k and then still had offers £10k below this but we wanted to sell so had to take the loss.
I know if you want to remortgage your new mortgage can not be for a longer period than what you have left, so if you have 25 years left on current mortgage your new mortgage can not be for longer, & it can not be for a higher figure unless you are paying off the htb loan. If you only bought in 2014 and put 5% down then I very much doubt you have any equity available to remortgage anyway, we definitely didn't.

When our rics surveyor came round to value the house for htb he said they almost always value it at the same as the offer price, that's what someone is prepared to pay so that's is what it is worth & like someone said before a new build comes with a new premium and if you sell relatively quick like we did you can expect to loose money in most cases

Under htb you can only rent out your house if you are a serving member of the armed forces and get posted away, so you wouldn't get approval for that

We put our house up in February & it was August before we had an offer, cash buyers tho & we completed within 4 weeks

agrinnall

How much equity do you have in the property? To get a BTL mortgage you're likely to need at least 25%, do you have that at the £270K level? I don't know much about HTB but if what Arlo suggests is correct then you don't stand much chance of being able to let.

darkvader

Arlo wrote: »

We have just sold our new build for 10k under what we paid new, purchased begfining of 2015.
Sounds like you are going to have to drop the price more, we had to drop £20k and then still had offers £10k below this but we wanted to sell so had to take the loss.
I know if you want to remortgage your new mortgage can not be for a longer period than what you have left, so if you have 25 years left on current mortgage your new mortgage can not be for longer, & it can not be for a higher figure unless you are paying off the htb loan. If you only bought in 2014 and put 5% down then I very much doubt you have any equity available to remortgage anyway, we definitely didn't.

When our rics surveyor came round to value the house for htb he said they almost always value it at the same as the offer price, that's what someone is prepared to pay so that's is what it is worth & like someone said before a new build comes with a new premium and if you sell relatively quick like we did you can expect to loose money in most cases

Under htb you can only rent out your house if you are a serving member of the armed forces and get posted away, so you wouldn't get approval for that

We put our house up in February & it was August before we had an offer, cash buyers tho & we completed within 4 weeks

Thanks Arlo, this helps me understand better.
Could I ask, did the govt accept the fact you sold for a lower price and did they accept the surveyor's report for £30k? If yes, then I understand now why it's better to do the survey AFTER there is a confirmed offer

Also, the govt says it takes 10 weeks from the time the survey is sent to final approval of funds to transfer, how did you manage to complete in 4 weeks?

Yes, we bought early 2014, but have always overpaid and have a decent amount of equity now. As I said earlier, we are very lucky that the properties have gone up in value, definitely no need for us to sell for a loss and we would not go down that route. Assuming a market slow down we have put ours for sale for about £20k less than what we should be able to put it for, but we don't mind that at all and open for offers lower than advertised price

Sorry you had to take the loss but atleast it's done with now

DV

darkvader

agrinnall wrote: »

How much equity do you have in the property? To get a BTL mortgage you're likely to need at least 25%, do you have that at the £270K level? I don't know much about HTB but if what Arlo suggests is correct then you don't stand much chance of being able to let.

I've worked the numbers and by Feb next year we should have enough. The current loan being 75%, given increase in property value we remortgage at 75% or max 85% (there are BTLs at 85% LTV), put in some of our savings and pay the govt off. If we remortgage at 80%, then we should have enough to pay the HTB loan

We then own our property on a BTL, with interest only payments and a good rental yield. The reason we dont want to do this because when we sell the property we are hit with 20% Capital gains tax. We also dont get our 5% deposit or the additional equity and locking more into the property, money that we need when we move. Not to forget the usual management fees, repairs and messy year end tax implications as we are in Australia

Thanks
DV