What consequences does 'breaking the chain' have?

[AndShesGone]

So very suddenly our buyers want an exchange. Fine with us. The place we're buying isn't ready, so we move to rented.

It's our family home we're selling, there's no weird capital gains tax or bill to suddenly pay is there if we don't suddenly plough our money into another mortgage? We have a mortgage agreement to buy that doesn't expire until December.

I'm wondering if I'm missing something?

[AndShesGone]

Bump

[JT05]

You can move out to rented or in with family, we have always done this. The profit money goes into your bank account. They only tax to pay is what you would on any savings account.

[HereIAm20]

You may only be able to rent a property for 6 months/12 months rather than just a couple so you'll need to budget for that.

Are you getting an entirely new mortgage because if you plan to "port" or transfer an existing one that also needs to be done within a certain time.

[GiddyOnZackHunt]

Is your new mortgage with the same company as your existing mortgage? If so you need to check you won't get redemption penalties.

[lalalonglegs]

If you're not also exchanging simultaneously on the house you are buying (although the completion does not have to be simultaneous), you could potentially end up without a house and stuck in rental while you find another.

[lalalonglegs]

It's more dangerous to do it the other way round - exchange on the house you're buying without the certainty of having exchanged on your own one - as if your buyers drop out, you need to find the funds to complete on your purchase or lose your deposit and possibly more money on top.

[AndShesGone]

Ok that's all great. We're happy to move into rented for 6 months. No redemption penalties and not porting the mortgage, taking out an entirely new one.

[Bearbehind]

There's no capital gains tax implications for selling your private residence so that's not a concern.

As someone else said, the biggest worry is the cost associated with the additional move required to rent and the fact you're unlikely to get a tenancy agreement for less than 6 months so it's either resign yourself to paying for 6 months whether you need it or not or some kind of holiday let arrangement which will be expensive per night.

Also you have to consider the risk of your potential purchase falling through and prices rising whilst you're off the property ladder.