Can you sell a house within 6 months of purchase?

by Readers Question

4 years ago

Can you sell a house within 6 months of purchase?

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Can you sell a house within 6 months of purchase?

I am aware that it isn’t easy to sell a house within 6 months of purchase, but speaking to my solicitor the other day it would appear to be nigh on impossible. She seemed to think most lenders would reject any application without even looking at it if the property hadn’t previously been owned for a minimum of 6 months, in some cases it could be as much as 12 months. Can you sell a house within 6 months of purchase

I find this hard to believe. Surely if this were true then it would be very difficult to make any money out of property development.

Does anyone have any experience of this problem?

Thanks

Onslow



Comments

Mark Alexander

4 years ago

I think your solicitor is wrong and has bought into the scaremongering that has been floating around the web for a few years now. This also leads me to believe that she doesn't work for developers like you and on that basis is probably the wrong solicitor to be dealing with.

Your business model is buy, sell refurb. Many of my family operate the same business model without problems. If the property is purchased and sold through proper estate agents and the conveyancing is organised through solicitors who mortgage lenders trust then it is highly unlikely that you will have a problem.
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Milena Toncheva

4 years ago

Hello Mark,
Does it matter if the prperty was purchased cash or with a mortgage? If I buy a property with a BTL mortgage, I have been told that I cannot refinance after refurbishment until I have owned it for 6 months. Also, i have been told that there are some lenders that might allow you to remortgage in less than 6 months but they will remortgage on the purchase price, not the market value.
Thanks

Mark Alexander

4 years ago

Reply to the comment left by "Milena Toncheva" at "11/11/2014 - 12:26":

No
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Paul Shears

4 years ago

The house opposite my own was purchased and given a light overhaul (£10K spent) in the first month and then put on the market. It sold at the end of the second month and the sale completed by the end of the third month.
I guess that will be quite a capital gains tax hit though....

Mark Alexander

4 years ago

Reply to the comment left by "Paul Shears" at "11/11/2014 - 19:43":

CGT will not be applicable on a transaction of this nature because the property was never an investment, e.g. let for at least 6 months. Profits will be taxed as earned income.
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Paul Shears

4 years ago

That's interesting Mark. I hadn't realised that. I had assumed that as it was not the owners principle private residence it would be hit by capital gains tax.

Mark Alexander

4 years ago

Reply to the comment left by "Paul Shears" at "11/11/2014 - 20:03":

I can assure you that's the way it is Paul. No annual CGT exemptions apply to this scenario either!

Given the above the reason for the readers question and my response on the linked thread below may well make a lot more sense too.
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Onslow Clough

4 years ago

Thanks Mark, my plans may well have been scuppered had this been the case. It didn't sound right when she was saying it.

Reply to the comment left by "Milena Toncheva" at "11/11/2014 - 12:26":

Firstly, no it doesn't matter whether the transaction was cash or financed. The underlying issue is whether the 'quick turnaround' transaction is fraudulent and a money laundering scam. That is the fundamental concern re the '6 month' guideline.

There are indeed lenders who allow remortgage of a property owned within 6 months (only usually an issue for BTL deals and not normally a problem for resi deals anyway) and yes there are indeed lenders who will remortgage on to the 'new' open market value if a property has had it's value enhanced by way of a refurb.

First port of call for any more discussions? An experienced and knowledgeable Broker e.g. http://www.property118.com/member/?id=314 🙂

Howard

Mark Alexander

4 years ago

Reply to the comment left by "Howard Reuben" at "13/11/2014 - 17:42":

Hi Howard

Just to summarise the position here for you

Onslow is looking to sell the properties inside six months, not to take mortgages or remortgages on them himself. His solicitor has told him that his buyers will struggle to get a mortgage, I've explain that's rubbish so long as he buys and sells through reputable estate agents and uses a reputable conveyancer.
.

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