Do We Have Any Recourse?

[DontWantToBeHomeless]

Long story short(ish):

Landlord is being forced to sell the house we've rented for 9 years, wants us to buy it, DH and I have been approved for a 100% mortgage - all good so far...

Valuers turn up to inspect the house, discover the loft conversion isn't up to regs and can't be classed as a 3rd bedroom - we can sign something to say we "won't use it as a bedroom" to allow the mortgage to go ahead, even though we have been using it as a bedroom for the past 9 years, that was the whole fecking point in moving to a 3 bed house! FFS

Things are progressing, solicitor has sent contracts for us to sign etc.

But here's my query - shouldn't the value of the house now reflect that it is NOT a 3 bed and is actually a 2 bed with "loft storage"? Surely we can't be expected to pay 3 bed price for a house that isn't.....????

No idea as yet what it will take to make the loft "liveable" but I don't see why we should have to pay for a 3 bed house AND pay to make the loft meet regs! If that's even something we would have to do, but if we didn't wouldn't that make any buildings insurance invalid if the worst was to happen?

DH is happy to proceed, doesn't see an issue, can't see why I'm making a fuss - I guess he's just relieved we a) meet the criteria for the mortgage on this house (specific circumstances) b) don't have to move 9 years worth of stuff and c) won't end up homeless as there is nothing else to rent in our area and no guarantee we'd get a mortgage on another house.

I'm just so confused by the whole sodding thing, and angry that the landlord misrepresented the house in the first place by advertising it as a 3 bed when he knew the loft conversion was dodgy!

Any insight/advise welcome

As PP asked. Who valued it at £150k?

we haven't had anything from anyone to say it's been valued lower due to the now lack of a 3rd bedroom but it's always going to be less as a 2 bed than a 3 bed. The question is whether that new value is materially less than £135k

Just buy the house it sounds like a good deal whether two or three bedrooms. Find out why it failed building regs, does the survey say why? Or get an independent surveyor (or builder) in to tell you.

Absolutely this - you're paying less than a 2 bed would go for. And you'll lose your home and have to find a rental property which seems to be hugely stressful at the moment, because you sound likely to struggle to get a mortgage on a different property. You'd be daft to rock the boat TBH...

You've had a valuation report - given they've picked up about the loft conversion, it was clearly more than a "it exists, its in Acacia Avenue, therefore it's worth £X" type of valuation.
What did the valuation report give as the value for the property?

You're comparing apples and oranges.not isnt about whether £300 more a month is fair. That's the price of your mortgage, it is what it is.

You need to know whether the valuation is based on a 2 or 3 bed. You also need to know if the 3rd bedroom is safe as a bedroom (as in, did it meet the standards at the time it was built or not).

Finally, you need to know if the house is worth the cost to YOU. Can you get something similar elsewhere for the same money?

If the house "should" be 150k but you are paying £135k, then the bedroom issue may be accounted for. Can you afford £150k for a different 3 bed? Because the mortgage on a 3 bed for £150k will be a lot more than a £300 per month increase in outgoings than a £135k property.

@Whataretheodds we don't know who originally valued it at £150k, that's just the figure the estate agent has put on the paperwork thus far - this is what makes me think the landlord has done something dodgy somewhere along the line, as he also had us down as paying £625 per month but up until a year ago we were paying £476 per month, then it went to £500 and then £550.

I think people who have said we're getting a bargain regardless are right actually, £135k for a 2 bed in our town is pretty damn good, especially given it's proximity to our parents and DD's schools.

I guess I'm more concerned with what happens if we don't "fix" the loft and continue to use it as a bedroom (nothing has happened in the past 9 years to make us think it isn't fit for purpose, and it does have a proper staircase leading to it).

@harriethoyle I don't think we'd struggle to get another mortgage, we have really good credit scores and a pretty decent income BUT it would have to be another 100% mortgage as we rent and haven't the opportunity to save a deposit - and this is what worries me, as I'm sure the 100% mortgages have been taken off the table by the government.

And thanks @WoolyMammoth55 for the kind comments - I am a massive stress-head! I drive DH mad

I'd ask a different estate agent to value the property. Tell them that the loft bedroom cannot be classed as a third bedroom, as it doesn't pass building specs. If the value is equal/more than what you're paying, then go ahead. If it's less then ask the landlord to take that difference off your offer.

But will you get it for a "proper" 3 bed, IYSWIM @DontWantToBeHomeless ? Because if 2 beds go up to £150k, 3 beds sound like they'll be ten of thousands more than your current £135k offer...

It sounds like everything but the 3rd bedroom works for you. If that’s the case then I’d probably buy it at the 135 price.

You will still have a 3 bed in practice if not on paper. Once you get settled in to the mortgage then you can look into doing a proper conversation so you have a 3 bed on paper as well.

I would find out what the issue is that disallow the classification. It could be paperwork or it could be that it needs a gut and full redo. Then you should also get a valuation as a 2 bed. It’s likely by your description the price would be comparable but at least you’ll know.

Sounds like you've had a great deal on the rent for years, are getting a good deal on the house and have been happy to use it as a three-bed all this time. Also doesn't sound like you have many - if any - options and that you'd stay there long enough to make the costs worthwhile. It's not a huge mortgage even though it is 100% and the monthly payments being much more than your current rent is because you've been paying low rent and need a 100% mortgage so that's not really to do with the 2-bed vs 3-bed matter. Okay it would be nice if they knocked some more money off, but I'm with your DH on this. You could ask for a reduction but if it's a no, I'd suck it up and push through with the purchase and deal with the regs issue when I could afford to fix it myself. With the number of people losing their homes when landlords sell up and being unable to get another home near their work/school, I'd be looking on the bright side with this one.

My DP had this problem with his first flat.

Bluntly, you are fucked if you ever want to sell it. This house is a turkey until it is resolved.

Get independent quotes from builders on how much it will cost to put right, and offer to knock that off the price.

Stop listening to people who work for the landlord, they have no incentive to act in your best interest.

No idea as yet what it will take to make the loft "liveable"

You're confused because you're ignorant. IN YOUR OWN BEST INTEREST make the effort, do some research. Find out.

Your LL wants to sell to a tenant because it saves him a whole lot of hassle and expense . IF he goes on the open market he faces agency fees, getting rid of you, more expense. Your home will most likely be sold for a higher price than he's charging you.

Don't miss a very good deal because you have no idea....

If you don't buy it, LL will put it on the open market, find a buyer who perfectly understands the loft livability issue. Then you'll be facing a legal eviction notice AND looking for a new home to buy. Facing removal costs. Packing, upheaval.More survey fees. When you WILL need to understand all the implications of every survey report... so sooner or later, you have to do the homework.

You need to know exactly what is wrong with the loft bedroom, it's no good saying it's failed building/fire regs without knowing. Once you know exactly what is wrong you can ask a builder how much it would cost to rectify the issues.

You need to get a proper survey done, that you pay for. Not the valuation survey fir the mortgage company.

The survey you pay for will tell you what needs to be done to the loft.

It may be something like the upstairs rooms need to have fire doors to give a protected escape route from the loft.

we don't know who originally valued it at £150k, that's just the figure the estate agent has put on the paperwork thus far - this is what makes me think the landlord has done something dodgy somewhere along the line, as he also had us down as paying £625 per month but up until a year ago we were paying £476 per month, then it went to £500 and then £550.

I'm not sure if I'm missing something or whether you really have so little idea about the buying/selling process.

The £150 would have been the Estate Agents valuation, that would have been the amount the EA advised their client, your landlord, to market the house for. There is nothing dodgy about that at all, it's all quite usual.

The discrepancy in the rent amount however does suggest something dodgy with your landlord and no one else. It's possible he has increased his loan on the property and lied to the lender about the rental income or there is something else going on. I would mention this to your solicitor just to get advice and a sense of whether it's cause for concern or nothing to worry about.

@Pinkdelight3 we've been "happy" to use the 3rd bedroom as a bedroom because that's what it was advertised as! We had no idea the loft conversion wasn't up to spec and had no reason to believe it wasn't all 100% above board.

I agree with PP that DH and I need to do some research and speak to an independent valuer and/or mortgage broker.

@harriethoyle we'd probably be able to get a mortgage for a 2 bed property in our area, 3 bed would more than likely be out of our price range (which makes me think we go ahead with this purchase and then look to put the loft right over the next few years).

So, a 3 bed house is valued at £150k+ and you are paying £135k.

A 2 bed house is between £90k & £140k.

I'm willing to bet that a 2 bed house with excellent loft storage is at the higher end of those valuations.

Once you own the house you can use it for whatever you want. You don't HAVE to do the remedial works unless you want to sell the house.

How much do you want the house? How much have you spent in conveyancing? How much would moving cost you?

I'd be tempted to offer £125k but keep to £135k

It can be out of spec for a whole number of reasons from the stairs being too steep to ceiling being slightly too low etc.

Get a independent valuation, you still have the extra room for you guys to use how you wish really!
House insurance you would put 2 bedrooms and loft conversion.

OP this house may well be a great deal but you must go into the purchase with your eyes open.

If it's valued at 135k as a two bedroom and it would cost 15k to put the loft right then the house would be valued as a three bed at 160k then that's great but if it's going to cost you 30k and result in a 150k valuation then it's not so great.

Sorry @FOJN I am completely clueless as I've never been a homeowner, we've only ever rented. So this is all very unfamiliar territory to me! I feel wholly out of my depth and the stress is turning my hair grey at an alarming rate!

I was so SO relieved when we got approved for the mortgage, I thought all our prayers had been answered, we'd get to stay put and FINALLY get on the elusive property ladder.

It's just our luck that something would go wrong, but really, until we know why the loft isn't up to regs, we can't know just how wrong it's gone...

It might be that the window isn't appropriate, or the door is the wrong type, or who knows? We will find out and get a quote off a builder friend of ours.

Did the loft have building regs sign off when built?

You need to approach this in a business-like way.

1. Get an independent valuation
2. Get an independent survey
3. Negotiate any price reduction via a solicitor

Don't be pushed around by people. You do not want to get stuck in a negative equity situation.

@OsirisservesAnubis DH is happy to put the loft right ourselves, he really doesn't think it's a big

My biggest fear is around the insurance, but again, I don't know if that's even an issue - something else to look into

I think, given house prices round our way, we'd probably be silly not to buy our house.

@FOJN it's a dormer conversion like in the image attached, so it might only need trivial things doing to get it to spec BUT it might need tearing down and completely redoing - a question for our builder friend definitely.

This is not the end of the world. Years ago I bought a house with exactly the same issue but it was marketed as a two bed and the price reflected that.

@OsirisservesAnubis I have no idea, we don't know when the conversion was done. It was already there when we went to view the house in 2014 🤔we had no reason to suspect it hadn't been done properly