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A bit of a predicament..

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hwolves
hwolves Posts: 3 Newbie
in House buying, renting & selling
Hi all,

Hoping someone can offer me their advice and expertise!

Myself and my partner have decided to separate 3 and a half weeks after completing on a house.

The house is a new build property and we took out help to buy equity loan on this. We have decided to cut our losses and sell, recognising we are likely to take a hit on this.

However, I have come across something I’d not heard of before which is the ‘6 month rule’. It seems there is some sort of rule which stops lenders lending on a property where the current owners have owned for less than 6 months?

Does anyone have any advice?

Thanks!
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  • davidmcn
    davidmcn Posts: 23,596 Forumite
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    Not really a "rule", just a commonplace policy which lenders have - properties changing hands very quickly are seen as an indicator of mortgage fraud or money-laundering. You can sell now to someone who's a cash buyer (or using a more broadminded lender), wait for a bit before putting it on the market, or start marketing now and see what happens (given it could take a while to find a buyer and for the transaction to progress anyway, by which time you might be at six months).

    Of course, buyers are in any event likely to be put off by a property being resold so quickly - either they won't hang around to hear your explanation, or they won't believe it. Not much you can do about that though.

    I take it you've already ruled out either of you buying out the other?
  • hwolves
    hwolves Posts: 3 Newbie
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    Hi - thanks for the reply!

    Yes I agree we are probably not in a great position and any potential buyers will be suspicious.

    Buyout is unlikely on currently salary levels unfortunately.

    Sounds like we are going to need to wait a few months then - no chain will be beneficial I suppose?
  • hazyjo
    hazyjo Posts: 15,470 Forumite
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    Did you fix a mortgage? How long for? You know you'll have hefty exit fees for that too?


    Is there no way you could try counselling or something? Know it's not all about the money, but you're likely to lose tens of thousands by selling now.
    2023 wins: *must start comping again!*
  • cloo
    cloo Posts: 1,291 Forumite
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    It might be best for you to find a way of one of you staying in the property for a while at least. Is there a second bedroom you might let out to help cover costs, for example? I think one may need to inform lenders if letting a room but I don't there would be issues with doing so.
  • hwolves
    hwolves Posts: 3 Newbie
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    Thanks for the further replies.

    Yes we fixed the mortgage for 5 years so the fee is something like £5,000 just for that..

    I’ve been told a few times that letting it out could be a good option!
  • xylophone
    xylophone Posts: 44,499 Forumite
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    Are you able to stick it out on a house sharing basis?
  • HampshireH
    HampshireH Posts: 4,488 Forumite
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    It is against the terms of the Help to Buy loan to rent it out, so this is unlikely to be an option for you.

    However could 1 not stay and get a lodger?
  • sal_III
    sal_III Posts: 1,953 Forumite
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    hwolves wrote: »
    Thanks for the further replies.

    Yes we fixed the mortgage for 5 years so the fee is something like £5,000 just for that..

    I’ve been told a few times that letting it out could be a good option!
    Letting is not an option with HTB equity loan.

    Do you even have the money to repay the mortgage+EL if you sell now? Bear in mind you will have to sell at hefty discount in these circumstances, but still repay the EL based on RICS valuation. So you are looking at potentially £10'000s on top of the £5k mortgage ERC.

    Your best bet is to come to an arrangement to either house share as a non-couple or at least one of you to keep living in the property with a lodger if need be and pay off the other party. Neither is ideal, but the alternative is losing on a huge amount of money.

    Either way an expensive relationship lesson.
  • Fosterdog
    Fosterdog Posts: 4,948 Forumite
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    You also need to consider things like early exit fees or buying out of utilities contracts too
  • sal_III
    sal_III Posts: 1,953 Forumite
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    Fosterdog wrote: »
    You also need to consider things like early exit fees or buying out of utilities contracts too
    Not necessarily, they are likely portable to wherever the OP ends up living next, or straight up no cancellation fee if you no longer live in the property. In any case will be drop in the bucket compared to everything else.
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