In this brief guide, we will answer the question “ how soon can you sell a house after buying it in the UK “.
People in the UK often wonder how soon they can sell a house after buying it. In truth, the answer is rather simple and depends on if you are a cash buyer or used a mortgage to purchase your home.
How soon can you sell a house after buying it(UK)?
In the UK there is no law prohibiting how soon you can sell your house after you have bought it. That being said, if you bought your house with a mortgage then most mortgage lenders will place a clause in the mortgage agreement which prevents you from redeeming your mortgage within the first 6 months of the mortgage.
There may be some flexible mortgage lenders who will let you sell a house within 6 months after you have bought it in the UK but these are mostly commercial mortgage lenders and buy to let mortgage lenders who understand that their borrowers may rely on being able to sell the house they have acquired as soon as possible in order to make a profit.
On the other hand, if you are a cash buyer then you can sell your home whenever you like with no restrictions.
There is also the matter of who you may be able to sell to.
A lot of banks and building societies will not lend funds to a buyer to purchase a property which was purchased within 6 months.
This means if you need to sell your home soon after buying it, you may struggle to find enough or any sellers who are in a position to buy.
Your best option will be to focus on cash buyers who have no restrictions placed on them.
Why lenders don’t lend on properties purchased within 6 months?
The reason why most banks and mortgage lenders do not lend on properties which have been purchased within the last 6 months is that most mortgage lenders have experienced significant losses caused from money laundering, fraud and other crimes where the perpetrator looks to extract funds from the asset as soon as possible.
If a lender sees that a property has been purchased within 6 months via its land registry checks which it does then they will not lend to you to buy the property.
The mortgage lender may provide you with a mortgage offer but will not provide you with the mortgage funds until the 6b months have passed.
Most mortgage lenders will use the date of filing at kand registry and not necessarily the date at which the home purchase may have completed.
If you are looking to sell your home soon after buying it, it is imperative that you register the new ownership at the land registry as soon as possible.
The limitation placed by mortgage lenders applies to both freeholds and leasehold properties.
Are there any mortgage lenders who will consider lending within 6 months?
There are some mortgage lenders who will consider lending to a borrower who is buying property within 6 months of its previous sale but this will be based on the mortgage lenders internal policies.
E.g if a property is operated by a well-known agency or business then some mortgage lenders may be more willing to allow the transaction to complete if the selling party is a well-established business.
In other cases, the mortgage lender may place extra requirements in you such as a much higher mortgage deposit so they can reduce their loan to value on the mortgage and hence reduce their risk exposure on the mortgage.
Some mortgage lenders may still be willing to lend to you to buy a property which was sold within 6 months but they may need further information from you.
Some of the information a mortgage lender may request from you includes:
- The name of the seller
- The address of the seller
- The date of birth of the seller
- The details of who the property was bought from including the name, address and date of birth
- The amount which was paid by the seller for the property
- The relationship between the seller and the party they bought the property from
- How the seller funded the purchase of the property
Other conditions where lenders may be more flexible
Below are other scenarios where mortgage lenders may be more flexible and offer a mortgage to someone looking to buy a property within 6 months:
- If the sale of the home is to liquidate the estate and pay off a mortgage balance or distribute an inheritance.
- If the first sale eas an exchange transaction with a property developer.
If you are looking to get a mortgage on a property which was sold within the last 6 months then a mortgage broker may be able to help you get a suitable mortgage.
Use a mortgage broker
You may want to consider using an independent mortgage broker to get a mortgage.
Mortgage brokers are important as they can access mortgage products from across the whole of the market in some cases.
This could be over 11,000 mortgage products. This may have some advantages rather than going directly to a mortgage lender.
A mortgage broker will look to understand your financial circumstances and then provide recommendations on which mortgage products may be suitable for you based on your mortgage affordability.
After giving you these mortgage recommendations, most mortgage brokers will seek your consent to apply for a mortgage in principle.
This will allow you to shop for your home easier as more estate agents and sellers may take you seriously or it will give you confidence that your mortgage is indeed a possibility before you make a full mortgage application.
Once you have found a home you want to buy and are satisfied with the mortgage offer for your mortgage then the mortgage broker will then look to get you a mortgage offer.
This will come with a key facts illustration document which details out the features of your mortgage including how much you will pay per month.
It will also contain information on if there are any limits such as early repayment fees, or annual overpayment limits.
If you are happy with everything you can then go on to secure your mortgage with the help of a conveyancer.
Your conveyancer will manage the legal searches on the property to ensure there aren’t any issues with it.
They will oversee the sales agreement to ensure it is in your best interest, they will manage the transfer of mortgage funds, exchange contracts with the seller or their conveyancer and set a completion date with the seller or their conveyancer.
In this brief guide, we answered the question “ how soon can you sell a house after buying it in the UK”.
If you have any questions or comments please let us know.
If you need financial advice and you live in the UK then you could contact the Money Advice service over the phone or via chat for impartial advice.
You can also contact the debt charity “Step Change” if you are in debt and need help.