Selling a house before buying

Davesnave

amandacat said:

I’m in the process of selling, relocating and renting. We will then look for somewhere to buy. 
The disadvantages are that we will miss out on the stamp duty holiday on our onward purchase. Also the hassle of moving twice. 
The advantages are having more time to choose our forever home, making sure we choose the right area and not having the stress of a chain.  We ‘might’ also get a better price on our next home with not having anything to sell. 

Those are the main advantages, summed-up succinctly. If one owns outright, then perhaps not needing a mortgage might assist with a minority of purchases. Our unlovely future home wouldn't have gained  a thumbs-up from lenders, but it was a steal for those with cash and a willingness to bring it up to scratch.

Scotbot

gaz1990_2 said:

jbainbridge said:

No drawbacks at all. Once you've sold and have the money in the bank you can buy without the stress of selling at the same time!

Thanks for the quick reply, jbainbridge. So, theoretically, I could wait as long as necessary to buy the right home?

Yes. The finiancial implications are prices going up or down and the cost of temporary accommodation.  If prices go up and you pay rent it is an expensive exercise but if they go down and you live rent free with family you are quids in,

frogglet

So your parents already have a house they live in, are they registered as part owners of the house you currently want to sell or is it all in your name?

GDB2222

Regardless of how the property is registered, your parents own a half share in the property. If it’s gone up in value they are liable for capital gains tax on the uplift in value. This will be at 18/28%, subject to the usual annual allowance. 

SandyN21

amandacat said:

I’m in the process of selling, relocating and renting. We will then look for somewhere to buy. 
The disadvantages are that we will miss out on the stamp duty holiday on our onward purchase. Also the hassle of moving twice. 
The advantages are having more time to choose our forever home, making sure we choose the right area and not having the stress of a chain.  We ‘might’ also get a better price on our next home with not having anything to sell. 

I'm in the same boat

FaceHead

It doesn't seem like there will be additional tax implications as a result of separating the sale and purchase, and it's generally a good thing to do, particularly to help you get to know a new area. 

There my be additional 'second home' stamp duty for yourself, if your interests in the other properties mentioned total over the 40k threshold. You parents may also have to pay some CGT on their share of the sale, depending on what happens to their share. Neither of these change whether or not there's a gap between selling and buying. 

AnotherJoe

amandacat said:

I’m in the process of selling, relocating and renting. We will then look for somewhere to buy. 
The disadvantages are that we will miss out on the stamp duty holiday on our onward purchase. Also the hassle of moving twice. 
The advantages are having more time to choose our forever home, making sure we choose the right area and not having the stress of a chain.  We ‘might’ also get a better price on our next home with not having anything to sell. 

Unless you buy a new build or a house with completed probate there will still be a chain, just likely a shorter one.

Falafels

I sold up a couple of months ago, and moved into my partner's (rented) house while his sale went through. He is selling to his tenant. I found it very useful to be able to move out in my own time, get the bulk of the removals over with before completion date and spend the actual day cleaning the place in a relaxed fashion.

We're looking to buy a property at the moment (indeed, will be looking at a couple this afternoon) at a time when prices are falling.

I have to say, if it's at all possible to sell up and take a breathing space before buying an onward property, that's what I'd do. If house prices were going up very rapidly then it could be a problem, though.