How to buy a house when locked into a rental contract?

idkwhattosay

Hi,

I've searched for "how long does it take for a mortgage application to get approved" and I've read some comments that quite frankly frightened me. General opinion on this matter (from start of application to exchange of keys) is that it takes anywhere between a month and a year with a lot of people saying it took months for them, with no chain.

What worries me is that my lease contract is 12 months (they won't do 6 months), how can I possibly know when is the best time to start the process (contacting a mortgage broker)? It seems like it can take a month in which case I'll waste a lot of money on rent for a place I won't even live at or it can takes months in which case I can be out on the street and possibly have a mortgage application rejected due to change of address at any later point.

I'm sure people have been in this situation before, how did you manage to lower your costs when buying a properly while renting? Any advice is appreciated.

need_an_answer

After the initial rental term has expired you will transfer to a periodic rolling contract as standard.Not all LL's and agents prefer this simply because they like the security of a set tenancy and possibly the pleasure of charging you for the renewal.

However after the fixed term your contract automatically becomes periodic which will allow you a little more flexibility in 1 month notice from you 2 from the LL.


Typically a property purchase takes around 5 months but until you know the type of property you are buying and the complexity its difficult to give more of an exact timeframe.


Chains make the process longer as does potentially buying a leashold property and dealing with the mamagement company,but the best thing to do is find your property and talk to the solicitor/mortgage company for a clearer timeframe in your particular case.

The general type of rule is never hand in your rental notice until exchange of contracts on the new purchase as until that point there is the chance that the purchase could fall through.

You may end up with a short period where you are paying rent and have the new place also so it is always good practice to perhaps factor those extra costs in.
Although its only usually a couple of weeks at most hopefully and if you can time it closer then all the better.

Be upfront with your LL and your solicitor to avoid any mis communication

idkwhattosay

That's the thing, I'm in my second year in the rental property and I had to renew for 12 months. They said they don't offer 6 month contracts (let alone monthly) because "the demand is high", so come May 2019 I will again have to renew for 12 months which is a pain in the !!! because it looks like I'll be losing money one way or the other.

I'm looking at leasehold properties with no chain and also looking to "optimise" my spending habits three months before I contact a mortgage broker. I was thinking of doing that (contacting LANDC) in January/February once I've decided on a property, after the holidays, but now I'm starting to think 4-5 months might not be enough time.

If my agency (simultaneously an investor and the management company for the properly) allowed monthly rolling contracts it would be a piece of cake, but they don't.

need_an_answer

I'm not a great advocator of the "wait for eviction line" but in the situation that you would be progressing a purchase of your own property at the time the next renewal came up I might be tempted to say stay put and continue to pay the rent until you are ready to leave!

it will take them longer to go through the eviction process and if by that point you are already about to leave then they would be unwise to not allow you a few months rolling contract.
( I would be more in favour of the communication route but when you are dealing with agents that only work on a fixed term contract then sometimes I think its acceptable)


As long as there are no major holdups I cant believe that any agency is going to insist that you sign a contract for a further year,let it roll!!

Work on 5 months for purchasing a leasehold with no chain but keep on top of the solicitor to make sure things progress in a timely manner

idkwhattosay

I will talk to them, thanks everyone for your input.

ACG

It generally takes around 3 months, it can be quicker (but unlikely). It can take longer, especially if an issue arises or solicitors drag their feet.

You could start looking around 3 months before your rental contract expires? By the time your contract finishes you should be more or less there. Your landlord if they do not allow you to go on a rolling contract for a month or 2 would need to go to court to get you evicted etc which all takes time.

Surely your landlord is not that much of an !!! that he would not allow you to go on a rolling contract for a short while.

arielsmelody

But your own mortgage approval is not the only variable when you are moving house - there might be unexpected legal problems that only surface when the solicitors get involved, or you might be in a chain that collapses. Whenever you start the process off, you need to plan how you will cope if you can't complete the purchase on the right date - maybe you could make sure you have enough savings to cover 12 months rent just in case, or plan to move in with friends/family temporarily, or plan to move to a new rental with a shorter rental period.

Hoploz

Just start looking would be my advice. How quickly will you find your new home? Some people look for months before they find so start now!

Yes it takes a few months and maybe longer. So chances are you'll be sorted with a few months still to run before your lease expires in May.

I don't know how much your rent is but it could be a price worth paying.

You may find if you keep your landlord informed, that he will let you out of your lease early and find a new tenant in time. Or if it is empty for a month or two then you may need to pay during the gap.

Landlords can be quite reasonable people sometimes

G_M

idkwhattosay wrote: »

..... I'm in my second year in the rental property and I had to renew for 12 months. They said they don't offer 6 month contracts (let alone monthly) because "the demand is high", so come May 2019 I will again have to renew for 12 months.......'t.

That may be what they said, but it is not what the law says.


When your 12 month (or whatever) fixed term ends, if you do not sign a new contract, AND you do not move out, then you automatically have a periodic (rolling) contract.


Housing Act!


Read:
* Ending/renewing an AST: what happens when a fixed term ends? How can a LL or tenant end a tenancy? What is a periodic tenancy?

idkwhattosay

I did not know that, thank you all so much. You have been more than helpful.

smem18

Just let it go onto a rolling contract at the end of the tenancy. They will want you to sign the new agreement and pressure you but just don't sign it. If they decide they want to evict you, this will take them quite some time. I know its not ideal, and I'd hate to treat my landlord like that, but if they aren't willing to work with you at all then what are you meant to do?! Just do your best to find somewhere before your tenancy ends. When we were looking to buy we informed our landlord as we wanted to be open and honest, and we explained we didn't want to sign for another 12 months. He really wanted us to sign a 6 month contract but we didn't want to do that either because we wanted to move in about 4 months time. We compromised in the end and went onto a rolling contract, but agreed with him that we promised not to end the tenancy in December or January, because he didn't want to have to attempt to find new tenants around that time, and also we needed to give him minimum two months notice, but ideally three. It all worked out fine.