Remortgaging to buy another house

[Square Leg]

Is this possible?

We have found a house we’d like to buy - currently in very good repair and totally habitable, but just not big enough for us yet.
Architect says it can potentially be developed into what we’d want.

We currently have around £600k equity in our house with an outstanding mortgage of £92k that has just over 4 years to run. The other house is around £400k to purchase.
Idea is to buy this other place and rent it out short term whilst getting plans drawn, planning permission etc, but still stay in our current house. (And then sell ours )
There’s nowhere locally to rent big enough for us (and we have two dogs which adds an extra barrier to renting).

How would we go about using our equity to buy the other and then renting it out but not as a BTL?

The other way would be a bridging loan, but I’m guessing at the amount to borrow the costs would become quite prohibitive?

Thanks

[Sarnie]

Depending on your income, this is possible.

The easiest scenario is to mortgage your property and buy the new property for cash........but it comes back to whether your income is sufficient....

[NickCQ]

Square Leg said:

Idea is to buy this other place and rent it out short term whilst getting plans drawn, planning permission etc, but still stay in our current house. (And then sell ours)

I'm sure you know this, but bear in mind that the three year clock will be ticking to sell your existing house to get the 3% additional stamp duty refunded.

[Square Leg]

NickCQ said:

I'm sure you know this, but bear in mind that the three year clock will be ticking to sell your existing house to get the 3% additional stamp duty refunded.

No, didn’t know that…
Why is there an additional 3% stamp duty?

Sarnie - I think we may hopefully be ok on that score.

[NickCQ]

Square Leg said:

No, didn’t know that… Why is there an additional 3% stamp duty?

In England (perhaps not Scotland?) there is generally an SDLT surcharge of 3% if you own two or more properties after completing the transaction.

There are some exceptions to this / scenarios where you can get refunded. One is if you are selling your main home to buy another (and you own other secondary / investment properties). Another is if you sell your other properties within three years such that you only have one property.

[Square Leg]

NickCQ said:

In England (perhaps not Scotland?) there is generally an SDLT surcharge of 3% if you own two or more properties after completing the transaction.

There are some exceptions to this / scenarios where you can get refunded. One is if you are selling your main home to buy another (and you own other secondary / investment properties). Another is if you sell your other properties within three years such that you only have one property.

Thank you.
We’d be aiming to sell our existing house and move into the new one within 12-18 months.

[LeoSayer]

Capital Gains Tax should also be considered.

[Square Leg]

LeoSayer said:

Capital Gains Tax should also be considered.

Which house would that be payable on?
Our current one when we eventually sell it?

Quick Google - payable on sale of a house that’s not the primary residence - this is our primary residence so no CGT pay?
Assume the other house would attract CGT when (if) we come to sell it?

Edited by Square Leg on Wednesday 10th November 17:06