Short gap between selling and buying, what should I do with the capital?

PeakyB105

Hi, I can only find answers dating back to 2014. I have sold my property and there will be a delay of around 6-8 weeks before my new purchase completes.  Should I leave the funds with the solicitor or ask for them back until I have a firm date.  (Over 200k). I don't have a high interest savings account (currently 0.9% over 100k) and it won't be there for long. Interest is paid yearly... Cost for solicitor to do a BACS transfer £30.  Is it worth the worry and hassle? Is the money safer with them?  thank you . 

user1977

It's no safer with the solicitors (unless your bank goes under and theirs doesn't, but they're all under the same guarantee scheme anyway, and in either case you are fully covered as the temporary higher limit will apply). Interest will be more than the CHAPS fees - up to you whether it's worth the minor hassle of moving the money around.

EssexHebridean

There are easy access accounts around currently paying anything up to 3%, so I'd say do the maths to be sure how you want to play it, but do bear in mind that you will have to transfer it back to the solicitor ahead of the purchase too - and you will need to do that within the faster payment limits probably over a number of days, or will have to pay further fees to move it as a lump sum... 

propertyrental

I'm not sure business accounts are covered by the guarantee scheme. Are they? Someone will know. Your solicitor will hold it in a 'client account' so if the solicitor goes bust the money is safe. But if their bank goes bust?

And how confidant are you about this 6-8 weeks/ What if your purchase drags on? They can you know! Or falls through? That happens too.

Get it back and look for the highest paying instant access account.

https://www.moneysavingexpert.com/savings/savings-accounts-best-interest/#easyaccess

user1977

propertyrental said:

I'm not sure business accounts are covered by the guarantee scheme. Are they? Someone will know. 

I know, which is why I gave the advice above...solicitors' client accounts have the same level of protection (per client) as the client would have in their own account.

I mean, you'd still have practical issues if a bank failed, as your money being ultimately protected doesn't mean you'll have easy access to it for a time-critical transaction, but we are talking about pretty minuscule likelihood of it happening.

Mr.Generous

Stick the whole sum into your current account.

Then visit as many cash machines as you can, request a balance but leave the slip for the next user to find and see how much cash you have just to p them off. No details are on the slip so you can do this without any risk.

badger09

£200k could earn interest up to around £900 in 8 weeks. Would that not be of any use to you?

markyp64

hi - I’m in the same situation - and I’m overseas in the run up to exchange. I’ve set up 4 instant access accounts - all at/below the 85k ceiling - earning about 3.0% each - so could transfer all of the money needed to solicitors in 4 days. Deposit money is within solicitors. Bit of a faff but I’ve £400k earning a bit of money rather than doing nothing. Similar to some of the other respondees.  Good luck 

Schwarzwald

Take the money back!
Never ever leave it with other people for no reason other than complacency.
also solicitors can go out of business, have a fraud case, etc

in addition, not sure your solicitor would even be allowed to hold funds to this extent without actual business need, not sure they held the right licenses for doing so

in amy case, not even a question to me:

your money, in your bank account

EssexHebridean

At the client’s request the solicitor would be fine to hold the money. People often do leave funds in client account in this sort of situation.

MobileSaver

propertyrental said:

I'm not sure business accounts are covered by the guarantee scheme. Are they?

I'm unsure of business accounts per se but money held in a client account on an individual's behalf is definitely covered.

markyp64 said:

I’ve set up 4 instant access accounts - all at/below the 85k ceiling

You didn't need to do this. Money from the sale of a property is protected by the Temporary High Balances regulations which covers up to £1,000,000 in any one bank for 6 months.