Buy first, sell later ??

Vtp2000

Hi All,

I was hoping for some help.

We have found a new house we like, but our existing house is still on the market and not sold. Am I able to buy the house we like as second residential property in the same area? We have the funds to put down the deposit on the second home so that’s not the issue, I am also aware of the stamp duty on the second property, although my expectation is that my existing property will be sold within 3 years in order to receive a refund.

Ultimately what options do I have?

1. Can I have two residential properties in the same area for a period of time? (E.g 6 months), if so will lenders allow me to do so?

2. Is another option to buy to let my existing property for an interim period? If so I’m concerned with CGT. I have lived in the property since 2012, and the max time I would let is 2 years given the refund rules on stamp duty (3 years)...

Any help is much appreciated

Thank you

Moneyminded

1. Yes you can have 2 properties in the same area at the same time provided you can afford them. How would you fund the new house if your current one hasn't sold? If you would have 2 mortgages you would need to ensure this is affordable for you.

2. Do you have any experience of being a landlord? Would your existing mortgage lender allow you to convert your mortgage to BTL? Would it really pay off renting the property out if you want to buy somewhere else as quite often it will put buyers off if there are tenants in situ when you come to sell the house. Would you be able to afford to pay 2 mortgages if there were gaps in between tenants?

Is there a particular reason you can't wait until you have an offer on your existing home?

ethank

How long has you house been on the market and why is it not selling?

AdrianC

Vtp2000 wrote: »

We have found a new house we like, but our existing house is still on the market and not sold.

RM link will help us to give you a guess as to why.
Are you getting viewings which aren't turning into offers? Or just no viewings?

There is one usual reason, though.

Am I able to buy the house we like as second residential property in the same area? We have the funds to put down the deposit on the second home so that’s not the issue

Can you afford to pay two mortgages plus all the other costs? Will sitting empty help your old place sell...?

I am also aware of the stamp duty on the second property, although my expectation is that my existing property will be sold within 3 years in order to receive a refund.

Correct. But what if it doesn't?

Ultimately what options do I have?

1. Push to sell your old place and get the transactions chaining as normal.
2. Own two houses.
3. Accept this particular house isn't going to happen, and hold off on the search until your place sells.

1. Can I have two residential properties in the same area for a period of time? (E.g 6 months), if so will lenders allow me to do so?

Of course. Providing your income supports two mortgages.

2. Is another option to buy to let my existing property for an interim period? If so I’m concerned with CGT. I have lived in the property since 2012, and the max time I would let is 2 years given the refund rules on stamp duty (3 years)...

Oookay, but... Will it let easily? What work will be needed to make it lettable? Will you be too emotionally attached to it? What if the tenants don't move out nicely in time, leaving it a smouldering wreck on the day of the court possession hearing...? Can you even get CtL/transfer to a BtL mortgage? Do you begin to understand the implications of starting a residential lettings business?

GDB2222

One risk is that your present house is overvalued. So, your finances are less rosey than you think.