To pull out of house purchase so close to exchange or gazunder?

[TitaniumBev]

Totally miserable - any advice/views/abuse welcome!

We're FTB's, both 30, scrimped for years to get deposit together. We both grew up dirt poor & wanted to have a bit of security before children so are keen to get going now and sick of private renting.

Offer accepted on house end of Jan, the asking price was kite flying given location (Croydon). They wanted 460k we settled on 440k, only now due to exchange next week after delays (both sides, minor errors).

Since then though all the news around the economy & housing especially around London has been terrible. Monthly drops of around 1 - 3.6%. Terrible rics reports & rightmove data etc. Similar properties in the area are coming on for less but there is not a lot coming on so hard to judge. Properties hanging around for a long time.

I now feel the agreed price is too high, a lot has changed in 4 months and I think it's best to walk away. I know this will screw over the vendors & the chain but don't like DH's suggestion of asking for a reduction so close to exchange. He thinks we should at least give them the chance. (How lucky!!!) Prices seem to be down around 6% he reckons split and ask for 3% off. (£13,000 ish)

Its such a big transaction, the market looks soooo bad and its not dream house or anything. Should I walk or offer lower? I'm not going to over pay for a house just to be nice/honorable unfortunately.

URGH!

@swim yes but in OP's case her job meant probably having to move in 5ish years. I only bought recently as knew house could be extended to 4/5 beds & was happy to stay in area long term (obviously life might throw a spanner) don't think most younger people are lucky enough to be as sure of future as I am.

FTBs no longer pay stamp duty on properies under £300k as of Nov 2017. Pre Nov 2017 a 2 bed terraced house on the side road next to my house would at most go for £275k but most sold for £250k or under because of stamp duty savings for FTBs and those houses are reall FTB or couple/single buyer houses as we are talking one double room and one single room, not much living space so not really a family house. Today (only 6 months later) those houses are on the market for £350k+ and one has just sold for £375k. This is in close to Beckenham town, which is still nearby to Croydon.

And a number of financial papers predicted that the FTB stamp duty change would push up prices and clearly this is happening. So sure in some months there may be a small drop but if a house is now selling almost £100k more than it would of 6 months ago there is one hell of a long drop to come to get back to where it was.

Totally agree Spectre8. Very little change will occur and the fat cats are still sitting on the available land, meting it out slowly to gain maximum profit. We are all just cash cows for them.

A lot of FTBs just haven’t been around to see history unfold in that way. Funny how the buyers turn on stupidly labelled groups like Baby Boomers, and Millennials. Has nobody noticed the fat cats? It would appear not, and yet they’ve been around for decades.

The fact that the Tory fat cats are so keen on Brexit tells you a lot. The future is not bright, and they’ve lied to you to get you to vote for their future. The gap between ‘us and them’ will create an underclass soon, if not already.

www.bloomberg.com/amp/news/articles/2018-05-23/london-home-price-falls-to-continue-for-next-three-years-survey?__twitter_impression=true

I mean...this says it all!

www.google.co.uk/amp/s/www.croydonadvertiser.co.uk/news/croydon-news/house-prices-croydon-fall-largest-1599854.amp

Cityam certainly doesn't seem to share the fear Croydon: concrete jungle where first time buyer dreams are made

That article is just estate agents saying Croydon has gone up in price recently due to affordability issues across more desirable parts of London. As the more desirable parts become cheaper so too will Croydon as people won't be pushed out as far. I'm not anti Croydon by the way! Just firmly of the opinion the original OP made the right choice money wise

I personally can't see affordability falling in the rest of London so as to come within most first time buyer budgets or flat owners seeking to upgrade to a house but time will tell!

Affordability fell enough for us to switch from buying in zone 5 to zone 3 within the space of 4-5 months this year. This is what worries me. Big falls would wreck the economy & our personal finances but can't stay at these crazy prices (without big wage inflation). You're right, time will tell.

Where did you end up moving to Kamma?

SW17 had been looking CR0

That's great if that's a better place for you to live We needed to be in Croydon either way so the question for us was whether to buy or wait. We decided to buy and no regrets so far. We have enough equity to absorb a reasonable reduction in prices but could be stuck if the market totally tanks!

@incy exact same position as you but figured if market tanks thattttt much the whole country will be in trouble anyway! We wanted to buy, were aware of the risks & negotiated down as much as possible. Have to get on with life right. Best outcome would be stagnating house prices in my opinion. Fingers crossed.

OP don't listen to folks with vested interests. It's your money and no doubt hard earned. Pull out if you need to. Offer less if you want to. Markets work both ways. I'm sure no one offered to send you a cheque when prices were going up. Do it and don't feel bad. I know I wouldn't lose any sleep.

"You don't want to go ahead at 440k that makes sense, it seems to not be a good deal now, it's up to you if choose to offer for a good deal or just walk away. It's a business decision, don't listen to all the people trying to guilt you into paying an inflated price, and yes a system that takes 4 months from offer to exchange is the basic problem, but you can't change the system, you work within it."

This. Throughout, I assume, all of the negotiations have been 'subject to contract' so if you pull out or change your offer then you are not going back on what you have agreed. Believe me, if the market had gone strongly in the other direction, the seller might have come to you and demanded more. We are buying in an area where prices are rising and our seller has done that to us.

But, if you end up renting longer that will quickly burn through any savings so, while you shouldn't allow yourself to be guilt-tripped, financially pulling out might not be the smartest thing to do.

Personally I would try to find a third way. If things like carpets and white goods aren't included, push back on getting those added. Insist that the seller pays for a professional deep clean. Check the survey carefully and push back on any issues. The seller will be pissed off but they definitely won't want the deal to collapse so if you push back on things which add value to you rather than the price, chances are you can negotiate some movement.