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Q&A » Buying and selling property
My current property is owned outright and don't necessarily need to sell it to buy the new home. I want to avoid being in the middle of a chain due to previous bad chain experiences.
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174Not all chains are bad. Make sure that you do structural surveys on BOTH properties, else you could find that the one for sale cannot be sold and ditto for the new one.
House prices might crash whilst you have two.
Bridging loans are very expensive and open ended.
I would put up with the chain every time.
Posted on 21 February 2012 |
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879The main problem with owning 2 properties is that you might have too high a proportion of you capital tied up in property. You are then over-exposed to market fluctuations in property prices.
Even if one is fully mortgaged, you should count 100% of both as property investments and count any mortgages against any cash savings.
If you would need to borrow in order to own 2 homes temporarily, it would be better to take out a bridging loan from a bank because mortgages usually have clauses restricting the amount of overpayment to 10% of the outstanding capital at the start of the mortgage year. With a bridging loan, you repay it all as soon as the existing property has been sold.
You don't have to start with the idea that you operate the 2 transactions in separate chains. You could start out as 1 chain and later split if there is a temporary problem.
Mike.
Posted on 21 February 2012 | Love 0 loves
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