Current home owner looking to sell, rent, then buy

Troughton

I own one property which I currently live in. I am looking to sell it, then rent for a couple of months in the new area I am moving to until I find another home to buy in the new area.
Are there any tax implications in the above approach? Given it is my primary residence I am selling, it is not subject to Capital Gains Tax but does this change at all if it is some time before you buy another home? (in some countries if you do not buy within 6 months of selling your primary home you get charged CGT)

Any pros/cons in the above approach (sell, then rent, then buy)? Apart from the obvious downfall of having to pay rent, I think the benefit of being able to take my time in buying the new home and also going in as a buyer without a chain would be appealing to the seller. I am a first time seller so any feedback/advice would be appreciated.

TripleH

Do you own any other property?

We sold our flat June 2020 and bought October 2021 when we relocated. (Rented in the interim).

We didn't have CGT to pay. We also owned no other property.

Your plan seems very sensible to me. The only issues are that as a seller it can be a pain selling once you've moved if it is a distance.

As a buyer from rented, be prepared for sellers to assume you should wait for them (and pay rent) whilst they look for their onward purchase and continue paying down their mortgage. We looked for chain free purchases to minimise this.

Good luck.

Thrugelmir

Troughton said:

 then rent for a couple of months in the new area I am moving to

Have you investigated the market for short term rentals?  May not be as easy as you think. 

Snookie12cat

TripleH said:

As a buyer from rented, be prepared for sellers to assume you should wait for them (and pay rent) whilst they look for their onward purchase and continue paying down their mortgage. We looked for chain free purchases to minimise this.

Good luck.

Why should the seller buy a house they do not like or move into rented when they do not want to, to help the buyer save money at their own detriment? 

Stubod

Troughton said:

I own one property which I currently live in. I am looking to sell it, then rent for a couple of months in the new area I am moving to until I find another home to buy in the new area.

..this is what we would like to do as and when we move, however finding a rental property for "a couple of months" will be really difficult, most Landords will probably not be interested in anything less than at least 6 months?

Ramouth

We rented for 6 months between selling and buying.  It probably did put us in a good position as a buyer.  What I hadn’t anticipated was how stressful I would find being off the property ladder.  House prices were shooting up in our preferred area and it was difficult to even get viewings.  I think I would do it again though if we were moving long distance.

TripleH

Snookie12cat said:

TripleH said:

As a buyer from rented, be prepared for sellers to assume you should wait for them (and pay rent) whilst they look for their onward purchase and continue paying down their mortgage. We looked for chain free purchases to minimise this.

Good luck.

Why should the seller buy a house they do not like or move into rented when they do not want to, to help the buyer save money at their own detriment? 

The counter argument is why should the buyer wait an eternity for an indecisive or slow moving seller.

The Op is aiming to be chain free so for an onward purchase, they need to remember that if the seller is stalling for whatever reason (even if not their fault), there is nothing to stop the Op walking away and find somewhere new.

I'm not saying the seller should settle for less, but that the Op (inexperienced but not a novice) should also not accept being mucked around either. He will have the power to walk away without the worry of a chain below him collapsing.

canaldumidi

Troughton said:

....
Are there any tax implications in the above approach? ....

Any pros/cons in the above approach (sell, then rent, then buy)?....

No tax implicatioms at all.

Pros: you get to know to area, and can take your time finding the right propety

Con: rentals can be hard to find in some areas and usually involve a ninimum 6 month Term. There again, puying will take 6months.....

lookstraightahead

Snookie12cat said:

TripleH said:

As a buyer from rented, be prepared for sellers to assume you should wait for them (and pay rent) whilst they look for their onward purchase and continue paying down their mortgage. We looked for chain free purchases to minimise this.

Good luck.

Why should the seller buy a house they do not like or move into rented when they do not want to, to help the buyer save money at their own detriment? 

They don't have to - but I'm another who will not hang around for sellers to say they want to move and then don't, so I just move on to something else. 

The reason is the seller is meant to be selling and the buyer is meant to be buying. If the seller won't sell, the buyer needs to find somewhere else. It's not a "let's pretend we want to sell" game.

op, great idea. Being chain free helped me recoup all of my rent because I negotiated a reduction.

lookstraightahead

Stubod said:

Troughton said:

I own one property which I currently live in. I am looking to sell it, then rent for a couple of months in the new area I am moving to until I find another home to buy in the new area.

..this is what we would like to do as and when we move, however finding a rental property for "a couple of months" will be really difficult, most Landords will probably not be interested in anything less than at least 6 months?

I think even six, or possibly 12, is ok (it was with us). Especially if you're moving area. We got our money back as we weren't in a chain.

MaryNB

Stubod said:

Troughton said:

I own one property which I currently live in. I am looking to sell it, then rent for a couple of months in the new area I am moving to until I find another home to buy in the new area.

..this is what we would like to do as and when we move, however finding a rental property for "a couple of months" will be really difficult, most Landords will probably not be interested in anything less than at least 6 months?

Unless it's advertised specifically as a short term let you'll struggle to find an rental property for less than 6 months.If you enquire about a property with a 6 month AST and tell the landlord you don't intend to stay longer you may not get the property. Where I live demand on rentals is crazy and landlords aren't going pick a tenant that will need to be replaced in 6 months if there are plenty other intending to stay longer. Costs them time and money. If you do find yourself looking at 6 month tenancies keep schtum about your long term plan and do not renew the contract after 6 months if you are still waiting to complete. Let it automatically become a rolling contract. 

Depending on how fussy you are, by the time you find somewhere, get an offer accepted and go through the (on average) 3 month buying process, a 6 month AST might not seem excessive.