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UK Investment Property

How to sell a property within six months of ownership?

In the UK, no law stipulates a minimum period of home ownership before you can sell it. In principle, the owner of a residential property can sell it again as soon as he or she wants to. However, some banks, building societies and mortgage companies will not lend buyers money to finance their purchase if the current owner (and intending vendor) purchased within the last six months.

Unless the buyer intends to pay cash, this restriction could limit interest and cause difficulty in finding a buyer during the first few months. If you need to sell a house soon after purchasing it, read on to discover more.

The reality is that you can sell a property whenever you want to! It could be after one day, or even on the same day.

This 6-month business relates to a CML guideline about when lenders can secure finance on a property. It states that a property should be owned for 6 months before lending can be secured on it…that 6 months could extend to the former ownership also in some situations.

The problem is that this is a guideline (not a rule or law) that affects lenders only and so has no bearing if the buyer is paying cash. The second point is that as it is a guideline, individual lenders can apply their own interpretation…some state 6 months, some less or more. Some ignore the guideline altogether and yet more are not members of CML in the first place and so take no notice!

The bottom line however is this: to reach the maximum market for a property sale e.g. you are refurbing and selling on…then applying for a mortgage at least 6 months after you own the property will open more buyers to you, particularly those that use residential mortgages through CML member lenders.

So, in conclusion – sell whenever you want to but to get the largest buying market and therefore price, it may be wise to market just before the 6 months is up. The guideline normally says you cannot APPLY for a mortgage before the property has been owned for at least 6 months. It usually takes several weeks to get from offering a property for sale and the buyer actually applying for their mortgage.


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