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Can I Part Exchange my buy to let property?

BackonTheMarket75
BackonTheMarket75 Posts: 3 Newbie
Uniform Washer
in House buying, renting & selling
Hi. I bought a flat on my own way back in 2006 JUST before the market crashed. It immediately went into negative equity. When I met my husband I moved out of it and rented it out through an agent and the mortgage was changed to buy to let.
I have since split with my husband and am living in a rented house as the 1 bed flat is no longer a viable option for me to live in. The current value JUST covers the remaining balance on the mortgage. It is the only property in my name. Am I able to part exchange it for a new build house??
Any advice would be appreciated- thank you :)

Comments

  • caprikid1
    caprikid1 Posts: 2,132 Forumite
    First Anniversary Name Dropper Combo Breaker First Post
    I guess the only people who would tell you are the builders in question. I suspect they might view it in negative equity though. Do you have a deposit etc , Money for Fee's ? I suspect most builders are expecting some kind of equity these days.
  • Bigrachel
    Bigrachel Posts: 36 Forumite
    Unfortunately I think you will need a deposit and relevant fees etc.. If the value only just covers the remaining balance you probably won't have enough equity to put towards a new build. Don't fret though, you can get help if you're buying a new build!
  • dimbo61
    dimbo61 Posts: 13,716 Forumite
    Name Dropper Photogenic First Anniversary First Post
    With the costs and changes to tax for landlords could you consider trying to sell now and see if you have something out of the sale to help with your deposit
  • G_M
    G_M Posts: 51,977 Forumite
    Name Dropper First Anniversary First Post Combo Breaker
    I doubt a builder would accept a property in Part Exchange unless it came with vacant possession. So you'd need end the tenancy first. Do you know how?

    The good news is that it's unlikely you'll have to pay Capital Gains Tax when you sell, if the value has not increased more than £11K.
  • BackonTheMarket75
    BackonTheMarket75 Posts: 3 Newbie
    Uniform Washer
    Yes I think that trying to sell it now is probably my only option. It's just a shame I've owned it for so long and will see no benefit from it :(
  • samspam
    samspam Posts: 82 Forumite
    I sell new builds and do part exchange. Firstly there needs to be a 30% differential in what you are selling and buying. i.e if your house is worth £100,000 you need to be buying at £130,000 or above. However part exchange valuations are based on 4-6 week sale prices which are lower than the marketing price an EA will give you to get your house on their books.
    My advice, get an EA valuation and also ask for a quick sale price.
    Speak to a mortgage advisor and see how much you can borrow.
    If part exchanging isn't possible, most builders offer assisted move type schemes where instead of buying your house in, they let you reserve a house whilst they market yours through an agent and pay your agents fees. However they will still want to market at a quick sale price.
    Hope that helps and yes it will need to be sold with vacant possession x
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