We have a cash buyer for our property. Should we sell and rent until we can buy?

Shrila647

We have been on the market for nearly a year but now have a buyer who wishes to proceed quickly.  The rental market looks very expensive but if we sell and rent short term what sort of return could we possibly expect on approximately £500k? This is a dilemma so any advice would be appreciated.  Thank You 

user1977

Isn't this a savings question rather than a house buying/selling one? You'd be better to look elsewhere on this site for top savings accounts etc.

FlorayG

Your first problem is going to be finding somewhere to rent - the market is vary competitive and most LL won't want a short term tenant

Albermarle

Regarding what do with £500K short term, similar questions are asked regularly on this forum.
Savings & investments — MoneySavingExpert Forum
So you might want to repost/have a look there.

The basic answer is that any easy access savings account will be OK for a few months due to the fact that Temporary High balances are covered by the FSCS compensation scheme for a period. 
Temporary high balances | Check your money is protected | FSCS

Savings | MoneySavingExpert


If it carries on longer, you will need to split it up into multiple accounts, all below £85K, to be 100% safe.
Or deposit it with NS &I where it will be covered 100% by the UK Govt, although with a lower interest rate 

gwynlas

If you have had difficulties selling your home then this might make sense, I have done so previously.

There are threads querying where to put house sale money short term.

pinkshoes

The advantage is that it puts you in a strong position for buying as you become chain free.

The down side is that:
- you have to move twice, so two lots of removal vans, packing up, unpacking etc...
- renting in some areas is VERY competitive and often more than your mortgage payments.

We looked at doing this years ago, but found that rental was over DOUBLE our mortgage, plus the motorbike insurance went through the roof as we could only find properties with a garage in a block. We then decided to put all our belongings in storage and moved in with the in-laws. We were there 4 months, but as we were chain free and could move at any time, we got an offer accepted on a superb house as the person needed to move quickly. 

So you could rent, or you could put some stuff in storage and rent something small and cheaper, or you could move in with family?!

There's always options, but as you've been trying to sell for a year and it's a cash buyer then I think it's worth considering. 

Shrila647

Thank you so much for your input pinkshoes it is appreciate.  What I probably should have mentioned initially is that my husband and I are both retired and do not have a mortgage, but to pay rent would be a big hole in a fairly small profit.  We were hoping that we may make enough interest on the profit to pay for the rental if it is not too long.  Yes, and the double removal costs need to be considered.

Olinda99

500k at say 4% is about 20k a year gross

Tax will be payable on some or all of this so say 16k left ie about 1,300 a month for your rental

Bigphil1474

Have you looked for a new house already? Even with a cash buyer in place, the system isn't designed well for quick moves. I think it's definitely worth considering the offer even if you have to move out to a rental, but also keep an eye out for an ideal move that might not slow the process down much more. And are you sure the cash buyer is actually ready to roll?

Herzlos

Where are you planning on moving to? Local or far away? If it's far away then renting over there may help you find something suitable.

How much stuff are you planning on moving with you?

How long are you expecting to be between the sale completing and your onward purchase? 

If it's not long you may be better putting everything into storage and staying in holiday rentals somewhere. Given your retired you may even find it cheaper to stay in a holiday flat in Spain for a few weeks than paying rent, or go on a cruise or whatever.

But that may only make sense if it's for a few months rather than years.

Sapindus

I have done almost exactly this, sold my house and moved into rental, just coming up to the end of the initial six months have bought a house and have let my landlord know in plenty of time that I am not renewing it.  I know he will be disappointed to have to re-let, but funnily enough I have a friend who is a landlord who said she would far rather let to someone who only had it for a short time because they want to "better themselves" as they are more likely to look after the property.  You will need to be pragmatic about the sort of house you rent.

Obviously the rental has been far more than my mortgage payments were but I had all the money from the house sale in the highest interest accounts I could find.  The house was too small really but I rented a storage unit and it sort of balanced out.  Have to watch out not to put more than £85k per banking group which with 500k could be fiddly.

Yes I have had to pay two lots of removals but this time the timing is more flexible and the distance is shorter because I am already in the area where I want to be. And I was much closer for viewings etc.  Plus having watched the first lot of removal men pack my breakable stuff I have done it myself this time and most of it is still in boxes anyway.

All in all it has been worth it I think.  The worst faff has been two lots of Royal Mail redirections.