Buying before selling

amillionlittlepieces

Hello Everyone.

I’m looking to ‘downsize’ my property at the minute but I’d like to purchase a house that needs quite a bit of work done. I’m worried about moving in to a place that will then be a building site for at least 6 months. I’ve thought about perhaps purchasing the property without selling my main residence and once renovation is complete, selling. Has anyone ever done anything like this and have and hints or tips?
thanks
AMLP 

hazyjo

Without knowing your finances, it's difficult to say.

Can you afford both? Mortgage free or mortgages on both? You'll probably be hit with 3% stamp duty.

Could you rent nearby for 6 months?

Davesnave

A complex question like this can't be answered easily, or at all on the info given.

Assuming the finances are there, you sell within the time limit and the new place becomes your home, the 3% extra SDLT will be recoverable, so the other thing to think about would be what may happen to prices in the meantime? It's by no means certain that prices will fall dramatically, but it would be very strange indeed if the dire financial situation as a result of Covid did not result in a depressing effect on prices.It might be safer to sell now and rent.

However long you think the renovation will take, it will last longer! There are other alternatives besides renting, depending on the property, the scope of the work and who's actually organising/doing it. We had the option of living in a big caravan in the garden, but because we had total control, we chose to stay inside and rough it a bit. Wasn't too bad, but we were sometimes lucky with weather and gaping holes everywhere. Meant the in-laws stayed out of the way though; definite bonus!

Scotbot

The extra stamp duty is refundable but it is a large chunk of cash ( an extra 3%) to pay put up front. Do you have that amount of money saved up? I renovated my house and stayed with relatives for a couple of months then moved in. I had a functional bathroom throughout but no kitchen. It was OK, you get used to it but I could not manage without an indoor toilet.

Renting isnt necessarily an easy option, you may not be able to find a suitable property for 6 months, particularly if you have pets and it will be an extra cost plus you should allow for it taking 50% longer than planned.

The advantage of selling first is that you can wait for the right property  and are in a good position to buy.  This makes a big difference if there is not much on the market as if you don't  sell first and a property comes up you like you won't be able to offer until you have an offer on your house (this means you are proceedable) and you may not even be allowed to view, so you risk losing it. It will be transparent as to whether your house has an offer on it via Rightmove or Zoopla. If you put your house up for sale and get an offer you may not find a house you like to buy so lose the sale on your house and have to start over.

It is probably  a financial decision.  I would cost out the various options assuminng if you sell first that you rent for 12 months and have to pay the extra stamp duty.