Buyer's support thread #5

[scribblegirl]

Sorry for breaking the last one

and for all....

Kirinm - will you try to re-negotiate after the 23rd?
Are you buying in London or elsewhere?

We are buying in London. I honestly have no idea what we'll do. It's only now starting to sink in that we are at real risk of a recession and we have been gifted money for a deposit that I don't think I could use knowing it could be almost immediately swallowed up by a market crash. We started to talk seriously about the possibility of pulling out last night and we've agreed not to push the sale too much so we can see what happens with the referendum.

Today is the first day my boyfriend has said anything about job security. I know recruitment in my industry has been frozen.

Tbh I doubt our vendor would re- negotiate. He fought over £600 so i wouldn't be hopeful.

Maybe the seller will see sense - would be putting the property back on the market post Brexit.
Our seller similar - very aggressive so far - very abusive of my surveyor, and insisted no planning consents needed for the extension, although it clearly was.
But I can't afford to be paying way over what may now be realistic.
Don't know what to do. Like you, I really didn't believe this would happen, and acted on that belief. Regret it now.

I'm voting remain, whois :)

Good luck to everyone. Hope things start moving. It just takes soooo long.

What does wind me up is being told I'm overreacting or overstating the possible consequences of leaving the EU. When you're talking about figures of £4-500k and job security I think it's perfectly acceptable to be worried.

Even my broker is now expecting a recession if we leave although still says we should buy because there won't be a big price crash.

Arrrrgh! Mortgage offer is £5k short. My broker thinks it's wrong as that's the amount they were prepare to lend before we sent in up to date tax returns which showed higher earnings in the last tax year. She's going to get them to re- issue the offer (I hope she's right)!

Kirin the mortgage market is not expecting a price crash. Not even a significant downturn in house prices.

I'm not saying your over reacting because I don't know how Britex would effect your job etc. and I don't know if we'll have a recession or how severe it will be but I don't think you need to worry about a substantial or extended negative equity on any property you buy as house prices always bounce back remarkably quickly.

We've been through what the solicitor sent us, and have sent back our queries. Not many - just a couple about the rear boundary and one making sure the log burner is staying as DH is wildly paranoid they will take it with them

Fuck sake. Apparently they've signed everything but have now discovered there's some items on their mortgage offer that their sol needs to deal with next week so they've gone back on their proposed completion date.

So fed up of this shit now.

Urgh why does it have to be next week?! Everybody seems to work so slowly. I hope it doesn't put completion back too far.

Hello everyone. I hid the thread as it has all been too depressing to think about in our purchase.

Our vendors are being a pain. The delay has all been caused because they used totally inept solicitors to buy the house in the first place so they don't have the paperwork. The vendors are simultaneously acting as if our solicitors are being ridiculous for asking for standard stuff (that their solicitor didn't do when they bought it) and pursuing their old solicitors for the extra costs that their incompetence have caused. But the vendor keeps messaging DH to claim that it's us holding things up.

Our solicitors have done loads of work to locate paperwork themselves and to work around the vendor's refusal to bloody sort out their own mess. The vendors were being arsey about buying an indemnity to cover some of the problems. Then yesterday they decided that they wanted to exchange. Their solicitors sent our solicitors some paperwork late afternoon and them immediately started phoning saying they wanted to exchange immediately (before our solicitors had even had a chance to check everything).

The vendor is still being a pain and wants to exchange today, but we aren't ready as our solicitors are checking everything, preparing paperwork and making sure there are no outstanding issues. The vendors want to move on the 24th, which should be fine, but they need to let our solicitors actually do their bloody jobs (because we don't want to be in the mess they are if we ever want to sell).

It's all so stressful and DH does not cope well with stress!

Potato - house prices may or may not climb back up after a post-Brexit crash. That's not really the point here. The point is that if there is a fall in prices after Brexit, and people who had an offer accepted at a time when they weren't anticipating Brexit or a market downturn, they will be paying more, at the time that they complete, than people who had their offer accepted maybe a month later, post Brexit. So it is the purchaser who will pay the price of the fall in prices, rather than the vendor. As the purchaser, at the time of completion, knows about the downturn in prices, should they not be negotiating the price down? Why should they take the burden of a downturn that happens within the period of ownership of the vendor?

Won't it take 2 yrs to leave anyway... so there may not be a crash straight away if there's a leave majority. There's no way of knowing, so we figured we would just crack on. Our purchase is only 2x our income, so we aren't too worried, whereas if it was a lot more then we perhaps would be.

DH and I are worried about brexit (totally agree it feels like the country is on the verge of jumping off a bridge) but we're still going ahead with the house purchase. I think the brexit thing is partly what's making our vendors so weird and difficult. They're interpreting our solicitors doing their job as stalling (presumably to see how the vote goes, with a view to pulling out/renegotiating if it is brexit).

We have tried our best to reassure them. We will be buying their house and moving regardless what stupid decisions the country makes. DH is desperate to move and we can afford the mortgage whatever happens (it's less than 2.5x combined income).

Regardless, I'm hoping there are a large number of quiet remainers. I think they are. The brexit lot are very loud and overbearing and I can imagine lots of people don't want to let on they're remainers because they don't need the stress of being shouted down by the very noisy brexiters.

I'm also hoping that fear of change will play a big part in people's decision making when they get into the booth to vote.

Ours is 5 x our salary. I think it's the fact everything will be uncertain and financial markets don't like uncertainty nor do businesses. It could be years and years until trade deals are negotiated. Imagine having to listen to more referendum stuff for another 10 years

Another 10 years of brexity crap would be awful. I honestly think DH would get so fed up we'd leave the country (he might want to do that in a few years if its brexit anyway).

We're in the north, so housing is much cheaper. If we were in London (or somewhere similarly expensive) we'd be looking at mortgages 5 times our income too. BIL lives in Brighton and his tiny one bed flat would sell for more than our 4 bedroom house up here.

The Brexit issue may be a convenient excuse for volatile prices this year, however long before Brexit warmed up, central London was softening.
There are now fewer than half the number of buying agents than 2 years ago.
Adding 20% to asking prices above the highest recent sale has stopped. The replacement one-trick pony lowers insignificantly (£50-100k) from the latest non-viewed one.
Central prime homes are reducing asking prices by 10-15% after a few weeks' inactivity.
This is in a largely discretionary market, where selling is effectively unnecessary.
While there is still no where for money to go, there is also less money than a few years ago.

Most of us have been asking how much longer before the low interest rate world breaks. Some banks are now keeping cash in their vaults to avoid being charged negative rates by their central bank.

Of course homes under 950k or so are cheaper than they were, so those parties are still selling tickets. Homes over 5m are taking serious cuts, which they can well afford to. The people who take the fall for someone who has cashed in on 20+ years (who really could easily take the cut), nobody forced them to buy, so they are perhaps as greedy as the seller. If you are barely affording a 1m+ home, and have not walked away, then your risk appetite must be large enough to swallow the loss. There are actually a lot of high end rentals about, too... for those with smaller risk appetites.

If you can sustain the costs of a home for the time you intend to live there, even with say (shock, horror) 5% interest rates or 30% fall in price, there's no problem. They're just numbers, and will not change your day. Worry is pointless. There's a lot more stress to come, and perhaps not too long to wait either.

Who can withstand a 30% fall in prices? Other than those who bought a long time ago and have seen their houses go up in price in short periods of time. A 30% drop eats through my deposit and puts me into serious negative equity.

I disagree. If you pay over the (post Brexit win) odds, then when you come to sell, you will find that your house is worth less money than you expected, and that you will therefore be able to buy something less nice than you expected.
If you pay £300K, when you should in the post referendum market be paying £250K, you are £50K out of pocket. You could be using that £50K to buy a nicer, more valuable property. Or you could be spending it on a better quality of living. Or not spending it, and taking out a lower mortgage, which would mean not paying all that interest on the borrowed £50K.

Say you plan to live there for 10 years. As long as you can pay the financing including the loan, no reasonable bank (that is still in business) will force you to leave. Will the house's price tag affect your day or your happiness?

As we are buying a one bedroom flat for as first time buyers. I had hoped we wouldn't have to live there for 10 years as that means no children or severely cramped living conditions. A 30% drop is £120k! I'm not a millionaire sitting on a £2m house. I'm a first time buyer paying most of my salary to rent a flat I have and never will have any legal interest in.

So yes, if negative equity means not being able to move for 10 years that has a detrimental affect on our financial situation but also plans for a family.

kirinm have you exchanged contracts?

I'm now torn between 1) doing nothing - just going ahead with the purchase at the agreed price, 2) trying to negotiate down (scary prospect, and by how much?), 3) pulling out and trying to find something priced for post-Brexit vote, 4) moving to Scotland in the hope that that will mean can continue to live in the EU. But serious problem with dcs' schooling in England.