Purchasing flat but current owners want to stay for 6 months after purchase

FlorayG

Yorkie1 said:

newsgroupmonkey_ said:

If you're buying a BTL property with a sitting tenant, this should be significantly cheaper - I'd be looking at 30% below market value.

Have the sellers considered this?

But the proposal is not to sell with an existing tenant. It's a sale where the property owner is becoming a tenant, which is highly regulated and - I suspect - is not a regular BTL mortgage etc.

This may be correct but @n@newsgroupmonkey_has a point - you are buying a property you can't live in because someone else is living there and such properties are lower priced

kingstreet

macawac1 said:

Hello,

This will be a long winded post, but just want to give you as much info as possible.

My husband and I are looking to go travelling full time in our motorhome in the next few years. I am 59 and my husband is 58. We own our property with a small mortgage that will be paid off before we go. My 34 year old son also lives with us but cannot afford to buy his own property. We also have some savings put aside, currently in ISAs and a savings account. We will be selling our current property when we go travelling as I do not wish to rent it out (we have a large garden and a fish pond and I would hate to see these or the bungalow ruined by bad tenants - you do hear horror stories!)

Anyway, that is briefly the background. So with this in mind I have been looking for a property that we can buy outright before we sell our bungalow. This will be a much smaller property that my son can live in while we travel, and will also serve as a temporary base when we return for family visits etc (as well as being a UK address for us while abroad). 

We have recently viewed a flat that is perfect, as it has a drive suitable for a motorhome and car parking. It is being advertised as a buy to let property as the current owners wish to remain in the flat for 6 months after the sale. This is because they took out an Equifinance loan a few years ago secured on the property and now they are not able to obtain another mortgage until this has been cleared for 6 months. So this is one aspect I am looking for advice on. 

Another aspect is from the tax angle. If we were to purchase the flat we would pay the higher rate stamp duty, and the flat would also be subject to capital gains if we ever sold it. I was thinking about gifting the money to my son so that he could buy it (as he will be the one living in it, and we are more than happy to do this for him so that he has somewhere secure to live). However I understand that with the previous owners remaining in the property, this would mean he would not get the first time buyer's stamp duty rate. Is this correct?

Another consideration of course for gifting my son the money for the flat is that if we manage to live for another 7 years it will not be subject to inheritance tax. I also believe it would be safe if we needed to go into a care home and have our assets used to pay for our care, again keeping my son's future home secure for him.

Any advice gratefully received as it is a right old minefield!

This is unlikely to be true. If they are claiming they have to wait to do another lifetime mortgage until they have owned the next property for six months, it is possible to purchase a property using a lifetime mortgage.