Six Month Rule

Rainbow_Tea

Hi, 
I've been gifted a property that we're wanting to sell in 2021. To prevent any complications with the 6 month rule, we are waiting 6 months before selling. We will have hit the 6 month check point by mid April next year. As we're looking to sell it ASAP, when would be a sensible time to place the property on the market? We are considering early March. This is obviously a month and a half before the 6 month checkpoint - would that cause any issues? We're obviously not expecting the property to sell immediately so a 6 week window seems sensible. Surely the 6 month rule doesn't prevent the property being placed on the market earlier?
We are desperate for advice so any help would be really appreciated!
X

FinallyStoppedLurking

I imagine April will be slow time for purchases due to the end of the stamp duty holiday. 

pinkteapot

To clarify, there is no rule to prevent a property being sold less than six months after you buy it/take ownership. The issue is that mortgage companies won't lend on a property that's been owned less than six months, so you're limiting yourself to cash buyers. 

So, certainly nothing to stop you marketing it earlier. Someone more knowledgeable than me will be along soon - the question is at what point in the process it has to have been owned for six months - is it when the buyer applies for their mortgage (which will be soon after they offer), or is it at the point of exchange or completion, which will be later. 

davidmcn

pinkteapot said:

Someone more knowledgeable than me will be along soon - the question is at what point in the process it has to have been owned for six months - is it when the buyer applies for their mortgage (which will be soon after they offer), or is it at the point of exchange or completion, which will be later. 

The CML Handbook is rather vague (just "Please report to us immediately if the owner or registered proprietor has been registered for less than six months") but I would interpret that as being as at the point the solicitor is reporting to the lender - so immediately before completion. You can certainly start marketing well before six months are up though.

Rainbow_Tea

Thanks for the replies so far. Yes we appreciate April may be a slow time, but due to personal circumstances we are waiting. The way things are looking, there could be a stamp duty holiday extension anyway. 

Rambosmum

Quite frankly, unless you are certain of a quick sale, I would market it in January - if it is priced to sell or in an area of high demand it may be a week before you get an offer, if not, you could be waiting 6 weeks or more for an acceptable offer. The average sale time is 12 weeks from offer accepted, but for me that is fairly short (my shortest is 16 weeks, my longest 28 - both chain free! Several have been in-between). 

Also remember that from deciding to sell you can often have 3 weeks or so of valuations, contract with an agent, time to get the EPC, photos and floor plans done etc. 

theartfullodger

CGT:  Note as of now you need to report CGT to HMRC within 30 days of sale. 

And IMHO it is highly likely taxes will rise, including CGT, to pay for Covid & that "oven ready" Be*****it deal or no deal.  So selling before 05/04/21 likely to be cheaper for you. Appreciate there may be no CGT to pay owing to short time holding.  STRONGLY suggest you get market valuation for the date you were gifted it.  Ideally from 3 different sources

[Deleted User]

I know when i did one with Halifax that they wanted the 6 months passed on the date of mortgage application.  

Also, its not a rule as such. The industry splits with lenders who allow and it and lenders who dont.   And even with the lenders that dont, I have had afew overturn policy when its been a forced sale or there is a legitimate reason for it

Advertise it now and take advantange of the busy market but make sure the buyers aware aware that they need to find a lender who will do it prior to 6 months

BJV

Deleted_User said:

IThe industry splits with lenders who allow and it and lenders who dont. Advertise it now and take advantange of the busy market but make sure the buyers aware aware that they need to find a lender who will do it prior to 6 months

Could not agree more. Most people will be fine waiting for the house as long as they are aware. I would get everything ready and then start to market. 

Good luck 

Rainbow_Tea

Does anyone know whether the 6 month rule applies from the official completion date on the TR1 form, or when LRS get around to updating the register? The completion date was 21st October but it is yet to be updated on the LRS system due to the current climate. Any help would be really appreciated! X

davidmcn

Rainbow_Tea said:

Does anyone know whether the 6 month rule applies from the official completion date on the TR1 form, or when LRS get around to updating the register?

It's from the completion date.