Are there any downsides of this?

[BrambleRoses]

We have sold our house and our buyer is in a position to proceed, but the owners of the house we’re moving into haven’t found anywhere yet, so the chain is being held up.

We’ve been asked if we’d consider going into rented, we’re reluctant to do that for a myriad of reasons.

We are considering buying a cheaper property outright and moving in there temporarily until the owners of the property we like are in a position to proceed. We’d then want to hold onto it as a possible BTL.

Does anyone have any thoughts about this?

Have a look into stamp duty on second homes. I think you may need to pay extra.

No guarantee they will ever move and the market is moving fast. Talk to your solicitor about whether there are any options to lock them into a sale by a certain point. Suspect they will run a mile and you will have your answer

@whatnumber

Have a look into stamp duty on second homes. I think you may need to pay extra.

Thanks - we do, but then we can claim it back once we move as far as I can see, once we prove our main residence is the more expensive property.

@TreadSoftlyOnMyDreams but then we would still be in the same position as we have to move somewhere! So we would be looking for something else but wouldn’t be feeling pressured to find a house we don’t really love, as we’d have time.

I think you need to consider carefully how you purchase the temp house as technically your second house would be your additional not main residence so the extra SDLT would be owed. That aside, I think the main flaw in your plan is taking the pressure off of the vendor to find another place to live. As prices rise, you may find that the price you agreed is no longer the price your vendor wishes to sell at and your would have lost the similar rise in your own (I assume) larger property? Can your agent or conveyancer not get hold of the vendors people to put a timeframe on their move?

If you go ahead and intend to keep your additional house as a BTL I’d set up a Ltd company and purchase the house through that to avoid the SDLT issue on this one and any others InThe future.

Think carefully. We did this (into rented) and the vendor eventually got cold feet and pulled out at exchange. We’re still renting over a year later because so little is coming on the market.

I know, that’s one reason we really don’t want to go into rented.

Thanks - we do, but then we can claim it back once we move as far as I can see, once we prove our main residence is the more expensive property.

You will own two homes so will need to pay the additional SDLT on one of them one way or another.

You also will need to get a residential mortgage on the second home to begin with (will you pass affordability on 2 houses?) then may get early redemption charges if you later want to swap to BTL? (You can’t always let out homes with a residential mortgage…. You’d need banks permission).

I think I’d be putting your vendor under pressure to come up with a solution (eg go into rented) They can’t expect you to hold on forever!

Thanks, yes. We wouldn’t be getting a mortgage on the property we are buying. We could pass affordability but only just

I would consider looking at other properties. You may find something you prefer that can move quicker.

Your thoughts on increased prices will also be on the others minds as well.

We have looked but there is literally nothing. Which is the position the owners are in too I suspect!

Surely the onus is on the vendor of the house you are buying to come up with a solution.

@BrambleRoses

Thanks, yes. We wouldn’t be getting a mortgage on the property we are buying. We could pass affordability but only just

Sorry, just reread your OP and can see you said buying outright 🤦🏻‍♀️

Few things to consider then

Definitely look at SDLT rules. You will end up paying higher at one point, somehow
You’ll pay Capital Gains when selling the second home
Speak to a few letting agents - get a feel for what properties let well. You won’t be buying a home, you’ll be buying a business.
Have you looked at costs of running a BTL? We have one (I won’t say we’re an accidental landlord as we made the choice, but we needed to move and didn’t sell our house in time, so that was the option we were left with). After all costs, we don’t make a huge profit (although equity is increasing - but Capital Gains Tax…)
I’d advise getting a managing agent when letting. We have one and they’re worth the money to ensure, if nothing else, we stay on the right side of the law

If you go into it with your eyes completely open, it’s a workable plan…

We already have a rental property, although that was an accident of sorts - it was my house before I met DH and we decided to hang onto it.

Thank you. There’s a lot to consider. Of course the ideal would be if the owners of the property we like just moved but it doesn’t seem to be happening any time soon!