Preparing to buy your second home might feel just as daunting as being a first-time buyer. You’ll often be juggling selling your existing home and searching for a new property at the same time. If you’re ready to move on from your first home, here are three things to keep in mind.
1. You’ll often be part of a property chain
A property chain is a linked sequence of property sales where each transaction depends on the one before and after it. This is due to most people needing to sell their current home in order to buy their next property.
As a first-time buyer, you may have avoided being part of a property chain, or you were the last link in the chain as you weren’t relying on the sale of a property. However, when buying your second home, you’ll often be juggling selling and buying property, which can make the process more stressful.
There’s a chance that the property chain could collapse. For instance, if your buyer pulls out, all of the transactions in the chain might be delayed as you search for another buyer. In some cases, the owners of the property you hoped to purchase might look at other options due to the delay, and you could find yourself back to square one and searching for your next home.
As you’re dependent on other people, there may be factors outside of your control that affect the property chain. However, communicating and providing information to your solicitor as quickly as possible could be useful.
Some families opt to temporarily move into rented accommodation or consider short-term finance to avoid being in a lengthy property chain. You should weigh these options carefully, as they may be more expensive.
2. Using the equity in your current home
When you’re buying your first home, you’ll typically use your savings as a deposit. You could do this when buying your second home, but you might also use the equity you’ve built up in your first home.
Equity refers to the portion of your home that you own outright. When you bought your first home, you may have put down a 10% deposit, so your equity will have been 10%. Making mortgage repayments and the value of your home rising will increase the amount of equity you hold.
So, the value of your property and the amount you eventually sell it for will help determine the options available when buying your second home.
You might not use all the equity you hold as a deposit. You could also use moving home as a way to access some of this wealth, which you could use for property renovations or other expenses. However, keep in mind that typically the larger the deposit you put down, the more competitive the interest you’re likely to be offered when applying for a mortgage.
3. Paying Stamp Duty
In many cases, you benefit from tax relief when buying your first home. As you prepare to purchase your second home, it’s important that you consider Stamp Duty and what your potential bill would be.
In England and Northern Ireland, Stamp Duty is a tax you pay when you buy property or land over a certain price. In 2026/27, the thresholds and rates are:
- Up to £125,000: 0%
- The next £125,000 (the portion from £125,001 to £250,000): 2%
- The next £675,000 (the portion from £250,001 to £925,000): 5%
- The next £575,000 (the portion from £925,001 to £1.5 million): 10%
- The remaining amount (the portion above £1.5 million): 12%
Imagine you’re purchasing your next home for £500,000. The Stamp Duty due would be £15,000 – a significant sum, especially if you’re not expecting it. Calculating a potential Stamp Duty bill could help you avoid unexpected outgoings.
If your new purchase won’t be your main home, you may face an additional Stamp Duty surcharge.
There are similar taxes in Scotland and Wales, which have different thresholds and rates. In Scotland, you may need to pay Land and Buildings Transaction Tax, or Land Transaction Tax in Wales.
Get in touch
If you’ll be taking out a mortgage to purchase your new home, we could help. As mortgage advisers, we could search the market for a mortgage deal that suits your needs.
Please note: This article is for general information only and does not constitute advice. The information is aimed at individuals only.
All information is correct at the time of writing and is subject to change in the future.
Your home may be repossessed if you do not keep up repayments on a mortgage or other loans secured on it.
