If you are planning to rent out the flat prior to living in it, are you prepared to rectify any damage done by tenants prior to moving in? How would you feel about someone else living in 'your' prospective new home?

I think if you are OK with the above issues, you may well have found a solution...

It's great that you will have no redemption penalties on the new Mortgage when you transfer to residential.

It might be a good idea to have the tenancy running from month to month after the initial six months. This means that you can give them one months' notice to leave when (and if) you sell the house. Make sure your tenants understand this from the outset.

The net result is that you will have 2 properties (at least for a while).

A pitfall I can see is that you will sell the house before the tenancy on the flat has expired and will need somewhere to live in the meantime.

You may well go into rented yourself and if you take a minimum of six months on your own tenancy, you may be liable for the whole six months rental payments even if you move out prematurely...

Just to clear up the confusion.

I currently live in the house I'm planning to sell. I will live in it until it has been sold.

Regarding the flat I'd like to buy, I would do this on a BLT, get someone to live there for six months (possibly more if it takes longer to sell my house). This way, someone is paying the mortgage on the flat, whilst I can bide me time and sell the house at the right price.

I think it would have been sensible to have held on the house had I bought it a few years back, when prices were a lot lower. A house valued at £50K ten years ago, compared to £150K, to me makes it quite risky. A friend of mine bought a 2 bed masionette 11 years ago for £36K - it is now worth £180K. She paid the mortgage off last year - absolutely impossible if she bought at todays prices. House prices generally go in an upward direction - but even the experts couldn't have predicited what was to happen.