Found a house but not ready to sell current one

lm1981

Hi everyone, I am looking for some advice please. We plan to move house but need to get some minor but essential work finished on current property first. We have tradesman booked but due to lockdown likely to be mid to late June by time complete. This means we would be looking at July time to get house on market. 

We have found a house we like but they want to move asap (they have found something). It’s a risk us waiting till July to put ours on market and hope theirs is still available. I am trying to work out what our options might be if we took on (if even possible) both homes with view to sell current as planned later in year.

our current house is worth 200k and we owe 85k (115k equality)

house we have seen is 315k

our joint salary’s are 75k a year , no major outgoings due to child starting school in September and nursery currently closed. 

What options do we have and what would people recommend? Thank you 

Neil49

What immediately comes to mind is that if you take on 2 houses then you would be liable to pay stamp duty at second property rates. Yes, you get it back eventually, but you are looking at many months ahead after you have sold your existing property. 

Add on two lots of council tax, insurance, water, gas and electricity. And all this assumes that you find a buyer at the price you are looking to get.

Are you that desperate to buy that particular property? We spent 2 years trying to sell our property and find a suitable one to buy. Eventually we sold ours and moved into rented until we found a property we wanted. With hindsight it was the best thing we did as we suddenly became cash buyers and had a lot more control over the whole process.

What would I recommend is your final question. I recommend that you don't go down the route you are considering, especially in the current situation. Wait, another nice or even nicer property will turn up. 

Thrugelmir

How much cash do you have available to help fund the proposed purchase? 

eidand

i think you already know the answer. you're not proceed-able, your deposit is in your current house, which you need to sell first.
I'd say, get your house on the market and if the other house is still available, then you can start making offers. I would not go with 2 sets of expenses. There will be other houses. No need to rush

mpawlik

You can get a bridging loan and buy the new house whilst waiting for your current house to sell. It’s expensive but at least you will not lose your dream house 

lm1981

Thank you everyone , I agree with points raised , think I needed to hear it from an outside perspective to see sense. Will continue with planned work on current house (we have money in bank ready for it - 5k but that’s are savings too so agree our deposit is in fact the equity in current house) and then put it on market this summer and see what the landscape looks like.

thanks again for the quick and informative replies. 

AdrianC

lm1981 said:

Hi everyone, I am looking for some advice please. We plan to move house but need to get some minor but essential work finished on current property first. We have tradesman booked but due to lockdown likely to be mid to late June by time complete. This means we would be looking at July time to get house on market. 

We have found a house we like but they want to move asap (they have found something). It’s a risk us waiting till July to put ours on market and hope theirs is still available. I am trying to work out what our options might be if we took on (if even possible) both homes with view to sell current as planned later in year.

our current house is worth 200k and we owe 85k (115k equality)

house we have seen is 315k

our joint salary’s are 75k a year , no major outgoings due to child starting school in September and nursery currently closed. 

What options do we have and what would people recommend? Thank you 

The simple question is can you increase your mortgage borrowings by £315k + fees + £15k SDLT... and can you afford to service both mortgages until such time as you get the old place sold?

Let's assume you need a total of £340k to see you by. At 1.5% interest, that's £1,360/month. Let's be optimistic, and call it six months. Just over £8k in total.

oystercatcher

What work needs doing on current house? Can you not put it on market as it is and drop the price to cover works needed? 

tom9980

mpawlik said:

You can get a bridging loan and buy the new house whilst waiting for your current house to sell. It’s expensive but at least you will not lose your dream house 

My neighbour did that a few years ago it cost them a good £40k in the end. Taking a bridging loan when there is an increased chance of prices falling rapidly and the economy taking a big hit is not a wise choice at all.

csgohan4

mpawlik said:

You can get a bridging loan and buy the new house whilst waiting for your current house to sell. It’s expensive but at least you will not lose your dream house 

The question now is at what cost

steampowered

Your current house is worth £200k, the new house £315k.

You have £115k of equity, so to own both houses you would need £400k of bank debt.

Most lenders will only lend about 4.5x, so about £340k.

So, you cannot afford to take on both properties. 

Don't stress about it - get your house on the market. If it sells in time to buy this house, great. If not, you'll find another house you like.