Buying rented house from our landlord?

[woodchuck]

Just wondering whether anyone had a similar experience?

We have been renting for 4 years at slightly below market rental value. the landlord is my Godfather. He bought the house for £72k 12 years ago in a fairly delapidated state. His tenanats before us trashed the place ans when we moved in we spent a significant amount if time and money on new kitchen/bathroom/decorating/carpets. our outlay has been reflected in our low rent.

From the start my Godfather wanted us to buy the house when we were able - at the time I was a student. i now have a job and a decent income.

So my issues are that my landlord now wants to move abroad, and not have the house to worry about. We would like to buy, but as we have not specifically prepared to buy now I have less deposit than i would like.

However, landlord has arranged estate agents to value the house and said he will give us a 'cheap deal'. I am going to see mortgage broker to get an idea of what we can borrow.

How accurate will the Estate agent valuations be compared to the bank's valuation? There are a lot of houses sitting (languishing?) on the market in our area, and according to land registry search, no comparable properties have sold for more than £115k in the last two years.

Also, it is likely we will be able to put up 8-10% of this as a deposit. if we end up buying for less than the 'market' value of the house will we be able to access a more competitive mortgage deal? So instead of paying 12k deposit on a £130K property value (9% of property's value), we would potentially be paying 12k of a 115k property price with a value of 130k (therefore only borrowing 80% of house value). Does that make sense? Another option would be trying to increase our deposit.

I have a pension pot I could withdraw on (NHS) but have only a hazy idea of how this works. has anyone done this?

I am very stressed by the whole process as we definitely want to buy, but I feel we have a ticking clock over us, as if we can't get mortgage, or can't agree on purchase price we will have to leave sooner or later

I did the same 12 years ago. My house was then valued at £115K and the landlord agreed to sell for £100k. We had a lower percentage mortgage but the landlord had to sign a statement saying that he had agreed to sell at below market value.

I would say talk to some lenders, mortgages are harder to get now. The values were rising quickly at the time we purchased.

Good luck

thanks for replying - I have been having a good scout about to see what similar properties are up for and I genuinely think the agents are inflating properties far beyond what they are really worth, properties then sit untouched for months before lenders are eventually forced to take a reality check and reduce.

I have just frightened myself by digging out the old property detail sheet when the house was up for sale before we began to rent. It was up for £165k, and was in very bad nick - lights hanging off, sockets ripped off the walls, tatty carpets, marker pen graffiti on the walls. Previous tenants had been avoiding paying rent for a while and were eventually evicted. This was 2007, and I know the market was at the end of it's bubble at that point. i am now worried that my Gfather will feel like he has been robbed if we offer around 115 when he 'expected' to sell for so much more 5 years ago. But then, OTOH, we have dione a lot of work, maintained the house and paid his mortgage for the last 4 years,

I suppose i should stop second guessing him...

You haven't really 'paid his mortgage' though have you, you have paid rent that you agreed with your landlord.
I would look at the market price and take off say 80% of what I had spent on it and then make that my offer.

Considering how long his house would have sat on a sinking market, I have certainly enabled him to pay his mortgage!

Of course we have had the benefit of living in his house, but have redecorated throughout, landscaped the garden, replaced carpets and internal doors, fitted new kitchen and bathroom, and have insured the drains and central heating system. I don't know where to start adding up our spends on the place.