Mortgage Advice

sammorey121

Hi,

I own a flat in London which i've tried to sell but the market conditions aren't ideal at the moment - prices dropping due to a buyers marketl. I bought this property 18 months ago in my own name and renovated it, which in doing so increased the market value. I have circa £185k in equity in the flat, value of circa £600k.

I recently proposed to my girlfriend and we would now like to move out of London. We're going to get married in May 2019. We both earn good money however i've invested a lot in the flat and don't have a lot of cash. We've been trying to work out ways to buy another property given that the market in london is a bit stand still. I've modelled the tax implications of renting out the flat with the new changes coming into force and it basically breaks even on a short term basis. I could take circa £35k out of the flat (if converted to BTL) and my fiance has about £15k cash.

We could buy somewhere in my fiance's name without issues until May 2019 - one primary residence. Could i gift her £35k? We could also buy another property in both our names, and i could claim back the SDLT if i sell my flat within 3 years. We can borrow a fair bit between us but are limited on cash - given the usual 75% BLT LTV.

Does anyone know of ways to try and access some of the equity i have in my flat in order to buy a second property that would act as our long term primary residence. I'd rather not buy twice as we'd waste money on SDLT - on the basis of selling my flat within 3 years the CGT issue is minimal, and the income tax issue is not necessarily an issue, plus we can claim back the SDLT overpayment. We'd be looking at buying somewhere in the region of £600k - however i'd need to access circa £85k of the equity within my flat to achieve this.

Any ideas would be useful. Thanks in advance

Sam

ACG

It sounds like you have thought about the main options. You could gift the deposit to your partner with a couple of lenders but not all lenders would accept it.

Have you thought about sitting down with a broker to take a look at your individual options?

Also, what about taking a hit on the equity? I took a £10k hit on a house I sold recently in order to get a quick sale, that was on a property worth £155k.

minimike2

Just take care whatever you decide to make sure your mortgage broker has every detail of your facts - Thing like the fact you will be gifting a deposit and then living in the property will affect your lender options.

Thrugelmir

Renovation doesn't always add value. Buyer may decide to rip out your improvements and have a different colour scheme or layout for example. Price the property to sell.