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I'm going to have to let my first property go


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Hi All,

After a couple of months of extensive research I've hit a wall. I'm convinced that I'm going to have to sell my first property (main residence) in order to move up the ladder. I hope I'm mistaken, and would be grateful if somebody could shed some light.

I currently own a three bed semi in Liverpool. I bought it in 2012 for £107,000 and have since done a pretty major refurb ie Rewire, new heating, kitchen, bathroom, plastering and full decs and believe the current value is approximately £140,000. I'm confident it would let easily as it is in an area of great fundamentals and is a nice family home and I believe the property should see respectable capital growth. I would like to re-mortage to a BTL but I need to purchase a new main residence and this causes me a bit of a stamp duty headache!

 

Are the below calculations correct?

Current value  = £140,000 and amount currently owed = £75,000

 

£140,000 - £75,000 = £65,000 Equity

 

Remortgage on BTL @ 75% LTV = £35,000 deposit

 

leaving me £30,000 cash (disgregarding fees for now as I have other minor savings)

 

I plan to purchase a new main residency in Manchester as a joint purchase with my girlfriend, as this property does not suit our current needs and I can't continue to live here. The value of the new property is likely to be in the region of £350,000. Keeping my current property would mean our stamp duty bill would be £18,000 as opposed to £7,500 if I sell. 

 

I have concluded that I would be better to sell the property in Liverpool (painful as this is) and split £60,000 pot between purchasing my new main residence (my gf will contribute towards our new purchase costs also) and using the remaining funds towards a deposit for an investment property (more than likely using an SPV due to my personal tax affairs) and effectively start again.

Am I right in thinking that purchasing investment properties through an SPV will allow me to replace my main residences as and when the need arises without paying the additional stamp duty rate, as the company will be a separate entity to me personally? I'm aware that the company will pay it's own stamp duty on the properties it purchases but as I progress up the property ladder personally, I wish to avoid paying the increased rate for owning more than one property, as I will be replacing my main residence each time.

 

Can anybody see anything I've missed or another way of going about things? It's a shame to break the unwritten rule of never selling a property!

Thanks,
 

 

 

 

 

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