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BHO1995
Posts: 6 Forumite
Hi All,
First post so please bear with me.I am after some advice as to where I stand in my current situation.
I currently own a Help-to-Buy property in Wales bought for £110K with a 5% deposit. Shortly after buying this property I moved to England for work however I kept my property in Wales for visits home. I am currently renting in England.
I am now in a position to buy a property in England with my partner who is a first time buyer we have a deposit of approx £40K, we have found a property that we like that is due to go to auction in September with a guide price of £300k.
I intend on selling my first property in Wales but do not want to sell it before I have settled in England, I do not necessarily need my equity from the first property prior to purchasing the second.
Is it viable to purchase a second property prior to selling my first or will this require me to have a much larger deposit in order to obtain a mortgage. I am aware of issues regarding stamp duty on a second property but am I right in saying that any excess can be reclaimed once the first property is sold?
My main concern is that a lender will want me to have a larger deposit i.e. 25% as it will initially be a second property and if that is the case it will leave be £35k short making the purchase impossible.
Thanks in advance.
First post so please bear with me.I am after some advice as to where I stand in my current situation.
I currently own a Help-to-Buy property in Wales bought for £110K with a 5% deposit. Shortly after buying this property I moved to England for work however I kept my property in Wales for visits home. I am currently renting in England.
I am now in a position to buy a property in England with my partner who is a first time buyer we have a deposit of approx £40K, we have found a property that we like that is due to go to auction in September with a guide price of £300k.
I intend on selling my first property in Wales but do not want to sell it before I have settled in England, I do not necessarily need my equity from the first property prior to purchasing the second.
Is it viable to purchase a second property prior to selling my first or will this require me to have a much larger deposit in order to obtain a mortgage. I am aware of issues regarding stamp duty on a second property but am I right in saying that any excess can be reclaimed once the first property is sold?
My main concern is that a lender will want me to have a larger deposit i.e. 25% as it will initially be a second property and if that is the case it will leave be £35k short making the purchase impossible.
Thanks in advance.
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Comments
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So the Welsh property is sat empty, not rented out?I currently own a Help-to-Buy property in Wales bought for £110K with a 5% deposit. Shortly after buying this property I moved to England for work however I kept my property in Wales for visits home. I am currently renting in England.
Normal residential mortgage?
Yep, within three years, depending on when you moved out of the Welsh place.Is it viable to purchase a second property prior to selling my first or will this require me to have a much larger deposit in order to obtain a mortgage. I am aware of issues regarding stamp duty on a second property but am I right in saying that any excess can be reclaimed once the first property is sold?
Max 75% LtV is for BtL. But you will need sufficient income to meet affordability for both mortgages.My main concern is that a lender will want me to have a larger deposit i.e. 25% as it will initially be a second property and if that is the case it will leave be £35k short making the purchase impossible.0 -
My main concern is that a lender will want me to have a larger deposit i.e. 25% as it will initially be a second property and if that is the case it will leave be £35k short making the purchase impossible.
It sounds like you're assuming that the property will sell for auction at the guide price - my understanding has always been that this is usually set at the lower end of what they expect it to sell for, to entice people to make a bid.0 -
You would not be entitled to reclaim the extra 3% paid on the purchase of the English property if you never lived in the Welsh property "as your only or main residence". This requires more than occupation; there needs to be the necessary degree of permanence and expectation of continuity. It is far from clear from what you say that the Welsh property would have qualified as your "residence".Shortly after buying this property I moved to England for work however I kept my property in Wales for visits home. I am currently renting in England.
I intend on selling my first property in Wales but do not want to sell it before I have settled in England, I do not necessarily need my equity from the first property prior to purchasing the second.
I am aware of issues regarding stamp duty on a second property but am I right in saying that any excess can be reclaimed once the first property is sold?0 -
so do you intend to commit fraud against the HTB scheme?Hi All,
First post so please bear with me.I am after some advice as to where I stand in my current situation.
I currently own a Help-to-Buy property in Wales bought for £110K with a 5% deposit. Shortly after buying this property I moved to England for work however I kept my property in Wales for visits home. I am currently renting in England.
I am now in a position to buy a property in England with my partner who is a first time buyer we have a deposit of approx £40K, we have found a property that we like that is due to go to auction in September with a guide price of £300k.
I intend on selling my first property in Wales but do not want to sell it before I have settled in England, I do not necessarily need my equity from the first property prior to purchasing the second.
Q Can I own a Help to Buy – Wales home and buy a second home?
A No. Help to Buy – Wales is designed to assist you to move on to or up the housing ladder. If you can afford to purchase another home you will have to repay the HtBW shared equity loan in full.
....
Fraudulent claims will always require immediate repayment of the shared equity loan
assistance.
https://gov.wales/sites/default/files/publications/2018-09/180906-help-to-buy-wales-buyers-guide.pdf0 -
so do you intend to commit fraud against the HTB scheme?
No I do not intend to commit fraud, I intend to repay the HtBW equity loan in full. My question is that does this need to be done prior to purchasing a 2nd property?0 -
It sounds like you're assuming that the property will sell for auction at the guide price - my understanding has always been that this is usually set at the lower end of what they expect it to sell for, to entice people to make a bid.
I am aware that the property may sell for more than the guide price and am prepared for this providing that I only need a 10% deposit. I'm just concerned that if I need a greater deposit due to the mortgage initially being for a 2nd property then this will not be viable.0 -
If you’re cutting your finances so finely, how will you budget for the remedial work that has caused the property to be sold by auction in the first place. If the property is any way an attractive proposition, expect it to exceed the guide price.
My suggestion would be to sell then buy in the traditional manner rather than greatly increase your financial risks especially as funds, and possibly your experience in the property market, are limited.Signature on holiday for two weeks0 -
You would not be entitled to reclaim the extra 3% paid on the purchase of the English property if you never lived in the Welsh property "as your only or main residence". This requires more than occupation; there needs to be the necessary degree of permanence and expectation of continuity. It is far from clear from what you say that the Welsh property would have qualified as your "residence".
I have lived in the Welsh property. I lived there for a few months prior to moving and currently work shift so spend approx 60% of my time there. Where do I stand?0 -
what do you not understand about the quote from the link?My question is that does this need to be done prior to purchasing a 2nd property?
obviously the norm is it would be done at the same time, ie on completion date when you sell yours and buy the next one.
However, it is also very obvious it cannot be done after0 -
You shouldnt buy a 300k+ house in England with your partner if you still dont feel settled there. Equally it seems like way more financial risk and general hassle to have the Wales house if you do feel settled in England. I would say carry on with welsh house until you feel more confident committing to elsewhere.0
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