Q Myself and my wife are looking into moving from the EU back to the UK. We currently own a property over here that we are looking to sell and are wondering whether we should rent for a few months when we get back or look to buy straight away? I know that lenders have made a huge cut in the mortgages they are offering, so our thought process is that renting for a few months while we work on building up our credit scores and having income flow into our UK bank accounts could be a more viable option.
WC
A I think that you and your wife should rent somewhere to live until you have sold your current property in Europe. You are right in thinking that it would be a good idea to build up your credit records – which includes registering to vote – and having proof of a regular UK income before you apply for a mortgage. But it’s also unlikely – but not impossible – that you would be considered for a mortgage if you are both starting new jobs.
Another reason for waiting until your property in the EU sold is that you will avoid paying the higher rate of stamp duty land tax on buying your UK home. Because it would be a second property, instead of paying 0% in SDLT on the first £250,000 of the purchase price, this means that you would pay 3% on the first £250,000 and then 8% (rather than 5%) on the amount between £250,000 and £925,000. Different taxes apply in Scotland and Wales. Assuming it has gone up in value, selling your current property will get you cash towards the amount you will need to put down as a deposit, which should be at least 10% of the value of the property you plan to buy.
