Sell, rent then buy? England to Scotland

little_miss_messiah

Hi all looking for advice as I'm in a panic and trying to do this myself. 
I live in England, having 2yrs of a 3yr offset fixed rate left (with penalties)
I have a job offer starting 28th March. 
I need to sell my house to buy in Scotland but mindful of the different rules etc. 
My current plan is to put my house on the market and rent a place in Scotland until the sale goes through so I'll have a good deposit to put down (will prob be around 50% LTV) 
I've spoken to mortgage provider and they've said no penalties and can keep fixed rate as long I'm not without a mortgaged property for over 6 months. 
My worry is however the period I'll be renting in (and paying mortgage here, along with council tax, utilities etc) is going to hammer my credit rating and I'll end up eating into my savings. 
The new job is a little more money and I'd want to borrow against that salary but worried that 2-6 months of paying rent and mortgage will look horrendous financially.

Tbh this is just the technical side of things, Ill be doing this all on my own and its all a bit scary, I don't know a soul up there but after divorce and my father passing last year I have no living relatives and I think I need a new start, I've lived in the same small town all my life and want to be able to live near a city with the opportunities to socialise etc it would present.

TIA 

MovingForwards

I moved up without a job, a bit of money in the bank and my first month flat share rent paid, knowing 1 person and another virtually, my circle of friends rapidly increased due to hobbies and interests. 

Personally I would say rent first as it's easy to pick the wrong area to buy in, renting in the wrong area means it's only very temporary. There's plenty of flat shares too, which reduces your outgoings.

Don't forget it tends to be offers over in and around the city, which could be as much as 25% above. Look at the commuter belts, as there are a few with realistic prices.

Good luck with your move.

K_S

little_miss_messiah said:

My worry is however the period I'll be renting in (and paying mortgage here, along with council tax, utilities etc) is going to hammer my credit rating and I'll end up eating into my savings. 
The new job is a little more money and I'd want to borrow against that salary but worried that 2-6 months of paying rent and mortgage will look horrendous financially.

@little_miss_messiah As long as you aren't increasing debt in the interim period, what you've described above should not adversely impact your credit history with respect to a mortgage.

Do make sure you understand the rules/process (including whether ERC will be charged then refunded or put on hold) for porting with your specific lender prior to redeeming the current mortgage. Some will require that the intention to port needs to be flagged prior to redemption.

little_miss_messiah

MovingForwards said:

I moved up without a job, a bit of money in the bank and my first month flat share rent paid, knowing 1 person and another virtually, my circle of friends rapidly increased due to hobbies and interests. 

Personally I would say rent first as it's easy to pick the wrong area to buy in, renting in the wrong area means it's only very temporary. There's plenty of flat shares too, which reduces your outgoings.

Don't forget it tends to be offers over in and around the city, which could be as much as 25% above. Look at the commuter belts, as there are a few with realistic prices.

Good luck with your move.

Thankyou , yes the offers above thing is a bit confusing, wondering how it works versus lenders valuation and could be caught out by valuation being lower than offer if you have any insight? 

little_miss_messiah

K_S said:

little_miss_messiah said:

My worry is however the period I'll be renting in (and paying mortgage here, along with council tax, utilities etc) is going to hammer my credit rating and I'll end up eating into my savings. 
The new job is a little more money and I'd want to borrow against that salary but worried that 2-6 months of paying rent and mortgage will look horrendous financially.

@little_miss_messiah As long as you aren't increasing debt in the interim period, what you've described above should not adversely impact your credit history with respect to a mortgage.

Do make sure you understand the rules/process (including whether ERC will be charged then refunded or put on hold) for porting with your specific lender prior to redeeming the current mortgage. Some will require that the intention to port needs to be flagged prior to redemption.

That's good to know re credit score, mines very good atm. I do have ERC of 4% 👀 and that would scupper matters somewhat if it wasn't refunded , but I'm guessing if I'm borrowing more they'll want to keep my business or I'd just pay the ERC and go elsewhere
(Original mortgage was 120 and have offset and also overpaid it down to 80 in 4 years, looking to increase to poss up to 150 for exactly the right place)

MovingForwards

little_miss_messiah said:

MovingForwards said:

I moved up without a job, a bit of money in the bank and my first month flat share rent paid, knowing 1 person and another virtually, my circle of friends rapidly increased due to hobbies and interests. 

Personally I would say rent first as it's easy to pick the wrong area to buy in, renting in the wrong area means it's only very temporary. There's plenty of flat shares too, which reduces your outgoings.

Don't forget it tends to be offers over in and around the city, which could be as much as 25% above. Look at the commuter belts, as there are a few with realistic prices.

Good luck with your move.

Thankyou , yes the offers above thing is a bit confusing, wondering how it works versus lenders valuation and could be caught out by valuation being lower than offer if you have any insight? 

The seller has to do a property valuation before listing it, there's some exemptions but those properties you wouldn't be looking at. Start downloading, reading and get a feel for them.

Most lenders go off that valuation price, some ask for their own valuation to be done if the surveyor isn't on their panel; mainly specialist lenders rather than high street banks.

City locations tend to go to closed bids quite quickly, some list the property at a silly low price to get a lot of interest.

Anything you offer over the valuation has to be funded by you.

To give you personal insight:

Rent for a bit before buying, you'll get a better feel for what you really want, especially as you're going through big changes at the moment.

I didn't even bother looking at the city I rented in as I was priced out quite quickly after moving, let alone taking a paycut when changing jobs. I'd been looking at properties online since moving up, seeing what I liked / didn't like and due to renting got a feel for what layout I didn't want. I opened up my radius, checked travel costs and times then cross referenced it against driving in, whittling it down to as close as I could without spending daft money / time each month.

For several months I spent my weekends driving round different counties / areas getting a feel for them and started building a list of properties to view the roads and immediate location.

There was one property on my list I really liked, dreadful photos done by the EA, but I knew it was the one. Never been to the area and one day drove down the road, didn't even get to the property and knew the area was the right one and I booked a viewing. Spent ages looking around it, double checking things, measuring, chatting with the occupiers and made an asking price offer when I got home, seller said what price they wanted and the purchase / sale was agreed. I emailed my solicitor to make the formal offer and my broker to get the mortgage application in.

In rental I had the coffee and nightlife culture. As a homeowner I'm perfectly based for visiting and seeing so much more of Scotland, it's breathtaking and coffee by a loch tastes so much nicer than in a café. 

As for my friends, they live in the city and I've a bed / sofa when we go out, or I can do a quick train ride to get home; not as if it's happened yet as I moved at the start of the pandemic!

user1977

little_miss_messiah said:

MovingForwards said:

I moved up without a job, a bit of money in the bank and my first month flat share rent paid, knowing 1 person and another virtually, my circle of friends rapidly increased due to hobbies and interests. 

Personally I would say rent first as it's easy to pick the wrong area to buy in, renting in the wrong area means it's only very temporary. There's plenty of flat shares too, which reduces your outgoings.

Don't forget it tends to be offers over in and around the city, which could be as much as 25% above. Look at the commuter belts, as there are a few with realistic prices.

Good luck with your move.

Thankyou , yes the offers above thing is a bit confusing, wondering how it works versus lenders valuation and could be caught out by valuation being lower than offer if you have any insight? 

As explained above, lenders almost invariably use the Home Report valuation, so you know before you submit your offer whether there's a gap you need to fill. 

googler

"I have a job offer starting 28th March. "

Will you be commuting to an office?  If so, where is that?


"want to be able to live near a city"

Is the choice of city not dictated by your work?


"how it works versus lenders valuation and could be caught out by valuation being lower than offer"

As was said, every home for sale will have a Home Report; you get this from the selling agent. This will have a surveyor's valuation, and in 99% of sales, the buyer's lender accepts this valuation. You may encounter the 1% if your lender is an out-of-the-way English-centric one who lives in the dark ages. You could ask them first if they are happy with accepting HR valuations. 

In Edinburgh, at present, the social medias seem to suggest that in-demand areas are being snapped up within hours of going to market, at prices considerably over HR value, so you may need to look into what you have in terms of additional cash to put in - lenders will lend to the valuation and no higher. 

little_miss_messiah

googler said:

"I have a job offer starting 28th March. "

Will you be commuting to an office?  If so, where is that?


"want to be able to live near a city"

Is the choice of city not dictated by your work?


"how it works versus lenders valuation and could be caught out by valuation being lower than offer"

As was said, every home for sale will have a Home Report; you get this from the selling agent. This will have a surveyor's valuation, and in 99% of sales, the buyer's lender accepts this valuation. You may encounter the 1% if your lender is an out-of-the-way English-centric one who lives in the dark ages. You could ask them first if they are happy with accepting HR valuations. 

In Edinburgh, at present, the social medias seem to suggest that in-demand areas are being snapped up within hours of going to market, at prices considerably over HR value, so you may need to look into what you have in terms of additional cash to put in - lenders will lend to the valuation and no higher. 

Thanks for reply, job is in Govan and I'm hoping to live within 3-5 miles of Glasgow centre, there was an Edinburgh option but once I saw property prices I specified I could only consider the Glasgow position. 

I do have a reasonable amount of savings (and Zoopla is putting the low valuation of my property at 20k over what I was expecting too) so there will be some cash available for the right place.

little_miss_messiah

MovingForwards said:

little_miss_messiah said:

MovingForwards said:

I moved up without a job, a bit of money in the bank and my first month flat share rent paid, knowing 1 person and another virtually, my circle of friends rapidly increased due to hobbies and interests. 

Personally I would say rent first as it's easy to pick the wrong area to buy in, renting in the wrong area means it's only very temporary. There's plenty of flat shares too, which reduces your outgoings.

Don't forget it tends to be offers over in and around the city, which could be as much as 25% above. Look at the commuter belts, as there are a few with realistic prices.

Good luck with your move.

Thankyou , yes the offers above thing is a bit confusing, wondering how it works versus lenders valuation and could be caught out by valuation being lower than offer if you have any insight? 

The seller has to do a property valuation before listing it, there's some exemptions but those properties you wouldn't be looking at. Start downloading, reading and get a feel for them.

Most lenders go off that valuation price, some ask for their own valuation to be done if the surveyor isn't on their panel; mainly specialist lenders rather than high street banks.

City locations tend to go to closed bids quite quickly, some list the property at a silly low price to get a lot of interest.

Anything you offer over the valuation has to be funded by you.

To give you personal insight:

Rent for a bit before buying, you'll get a better feel for what you really want, especially as you're going through big changes at the moment.

I didn't even bother looking at the city I rented in as I was priced out quite quickly after moving, let alone taking a paycut when changing jobs. I'd been looking at properties online since moving up, seeing what I liked / didn't like and due to renting got a feel for what layout I didn't want. I opened up my radius, checked travel costs and times then cross referenced it against driving in, whittling it down to as close as I could without spending daft money / time each month.

For several months I spent my weekends driving round different counties / areas getting a feel for them and started building a list of properties to view the roads and immediate location.

There was one property on my list I really liked, dreadful photos done by the EA, but I knew it was the one. Never been to the area and one day drove down the road, didn't even get to the property and knew the area was the right one and I booked a viewing. Spent ages looking around it, double checking things, measuring, chatting with the occupiers and made an asking price offer when I got home, seller said what price they wanted and the purchase / sale was agreed. I emailed my solicitor to make the formal offer and my broker to get the mortgage application in.

In rental I had the coffee and nightlife culture. As a homeowner I'm perfectly based for visiting and seeing so much more of Scotland, it's breathtaking and coffee by a loch tastes so much nicer than in a café. 

As for my friends, they live in the city and I've a bed / sofa when we go out, or I can do a quick train ride to get home; not as if it's happened yet as I moved at the start of the pandemic!

I did reply to this but it didn't post, I am looking for exciting city life for a good 5 years or until I tire of it (my little Yorkshire market town has no live music venues, no cinema, v limited restaurants, not even a Starbucks, but I prefer indie coffee spots, none of those either,its all hairdressers, charity shops and bookmakers) , I'm not v outdoorsy (there's time for that to change tho)