Hi all, my wife and I are currently renting in London in a single bedroom flat with our 7-month old, but we're looking to move to Gravesend.
About 6 weeks ago we found a house we liked and secured it on £230k. It's a two-bed house with front and back gardens, spacious and bright, and only 10 minutes walk to the station, so great for the London commute. Also in a nice part of town and near to a great set of schools. Oh, and empty with no chain.
Brief description: original Victorian build, two-up, two-down, with ground floor living room and dining room wall knocked through into one room. Extension to back for kitchen, lean-to on ground floor and small bedroom on first floor.
The Homebuyer's Report however came back with some bad news - in summary, 1) a hole in the extension roof has caused water damage to the ceiling, 2) rising damp in the living room walls, 3) infestations in the floor and stair timbers, 4) electrical system uncertified, 5) gas system uncertified, and 4) asbestos detected in various places.
The Report also knocked down the value of the house to £225,000. So pretty serious stuff!
Now, we've saved up enough for a deposit with Help to Buy support, but our mortgage lender won't allow us a mortgage above the value of the house the Report declared - £225,000. So £230,000 is a non-starter right from the off. However we also need cash to do the repairs.
We had specialists look over the house over a fortnight and it's not nearly as bad as the Report warned, thank goodness - the roof will cost £600, the electrics £300, the damp and timbers £2,400. The gas is safe, and the asbestos is safe if untouched, which we intend to do (bar at some point sweeping the chimney and removing the lean-to roof, which is a nice to have rather than essential).
So just north of 3 grand which we would need to borrow, and it would take about a week, maybe two, to get done, during which we'd have to remain living in our flat. So to be safe, we'd calculated we would need to float £6,000 to do the repairs and keep ourselves going while the repairs are going.
So we go back to the vendors and on the encouragement of my parents, go hardball at £210,000, fully expecting it to move north sharply as negotiations proceed, maybe settling around £220,000 or so. We sent a long, polite email explaining our reasoning for the reduction (to pay for the loan repayments and the revaluation in the survey), but they responded with a measly counter-offer of £228,000.
We then offered £218,000, and they've said £227,000, final offer. Even though they know we can't get a mortgage above £225,000!
So...I'm not sure what we should do. In theory we ought to cut our losses, as they seem to be remarkably intractible. That's my parent's view. However a landlord friend of ours has warned that house prices are always rising, and £227,000 for a 2-bed, even if in a bit of a state, is a steal.
I fear that if we let this go, we'll not be able to find any affordable house in the future. And we need to move for the kid's sake, let alone our's!
So, should we abandon it, or stretch to £227,000? I'm tempted to offer £225,000 as our final offer, which is the most we can do.