First time buyer nerves

[xXwhenwillitendXx]

Well I had a letter last week from my landlord (privately renting) to say he wanted to sell the house and he would offer DH and myself first offer and he wants to do it private. Que the breakdown, crying and wondering where the hell I'm going to live with DH and toddler DD.
We live in a small village and have started to settle and see a future here, problem is the rented market in the area is very erm non existent.
So after given myself a good talking to we have considered buying the property as we've lived here 4 years so know its livable, and we get on really well with all our neighbours, it's in a good location and has everything we need for the family.
One of my big concerns though is that it's on a flood plane and medium flood risk. In the years we have been here the floods have come to the bottom of the garden (river flooding). I spoke to the neighbours who have said it's never flooded in the 60 years since its been built, the closest was in 2007, but even then it didn't come near the house. I've called unsurence company and they said we would get insurence no problem.
I've looked online and got a rough value of the property and I've sorted an appointment with the morgage advisor next week as we have managed to beg and borrow what we are hoping will be 5% deposite, however that will leave us with no savings at all.
What also concerns me is the property increased in value by 190% from 1998 to 2005 however only increased by 2% from then till 2017, Should I be worried about this??
As first time buyers I don't have a clue what I'm doing to be honest and it's just causing me anxiety and sleepless nights. Apparently I need the house surveying, a solicitor, check flood records, and all sorts which is just making me think I should stick to renting.
Sorry for the long post but has anyone been in this position or got any advice

The flood plane would worry me tbh. The price increase wouldn't, however you would be buying at the point of a housing market bubble so if you over stretch yourself you could end up on negative equity esp with a deposit that small.

I would look on the open market and see what other types of houses you could get for the money your current rented house is estimated at, you may find you find a house that's in better location, not on flood plane or bugger for similar amount of money.

I personally right now wouldn't buy, but that is a risk in its self.

The best way to make money on a house is to do it up (basically you start with a lemon) or it's in a very very up and coming location. Remember all areas have a ceiling price for a house, find out what your ceiling is for your road and make sure you have wiggle room.

Financially I think another recession is coming, so I would really consider this tbh

I've looked at other houses and there is none at our price range (houses are very few and far between around here) which would mean spending money to move into further rented accommodation and loosing a chunk of deposite money.
Sorry if I sound stupid but how would the negative equity effect the morgage?? We are planning an this being a long term family home of that makes any difference

If you can afford the mortgage repayments and you plan to stay mid - long term then buy it now.

As you plan staying long term don't worry about negative equity. Prices dip and rise in cycles.

Sorry if I sound stupid but how would the negative equity effect the morgage?? We are planning an this being a long term family home of that makes any difference

You wouldn't be eligible for more competitive interest rates - you'd be on the SVR (standard variable rate) offered by your lender once your initial deal ends (many people fix for 2/3/5 years at a certain rate, so after that period).

I'd say first steps would be look at Rightmove sold prices to see if it's a reasonable price.

Then speak to a broker (London & Country are pretty good and free) to check you can get an AIP (agreement in principle) for the mortgage amount.

Ask friends and family for solicitor recommendations. Online/phone ones are cheaper but from my two purchases I'd say there is an advantage to being able to visit an actual office (last minute signatures, chasing things up etc) if things get sticky. The solicitor can organise the surveys for you.

There would be a basic survey for valuation by the lender; we were given the option to upgrade to a more comprehensive survey when we were buying.

Thankyou. Is it of benifit to me that it's a private sale?? I would be looking into doing a private survey just for my own peace if mind, however I do know the boiler is new and the electrics, and the roof hasn't caved in in the last four years.
Am I at a benifit from living here previous to purchase???
The morgage payments should be less then the rent I'm paying now, and as far as I'm concerned neither me or DH should have any drop in income, infant we should hopefully have more disposable income as DD gets older.
The house hasn't been valued yet, but from looking on rightmove I have a rough estimate to what it should be. Should I also get my own valuation done even if the landlord does one??

Best indication of value is recent sales of houses like yours in your area esp the road you live in. Your landlord benefits from a private sale as he doesn't need to pay estate agents fees. He should charge you a price that takes his saving into account.

I would get a your own survey done for peace of mind. The mortgage company will get a valuation done as part of your mortgage offer.

You will need a solicitor/conveyancer obviously, so need to consider their fees, as well as search fees and any payable SDLT.

If the mortgage payments are less than the rent then it's probably worth it if you're planning on staying there long term anyway.

So say you buy the house for 200k and get a mortgage for 190k, on a fixed 2 year mortgage and the market crashes and when you come to renew your mortgage the bank values your house at 130k, your now in negative equity and can't get a new fix mortgage so will be on a out of contract variable rate which in recessions tends to be almost double what you would have been paying and obviously everyone else is in the same boat so selling is nie on impossible.

I basically very simply described the housing crash of 10 years ago.

Obviously this is all a guess on the market, if the market tanks your in trouble effectively if you over pay on a house.

Just be careful

Best to take a 5 year fixed mortgage if you can which will mask any 'downturn' waitingforsun predicts! Definitely use a mortgage broker to find the best deal for your own circumstances.

Thankyou everyone, has given me a lot to think about. Think I just need to take the plunge if I can. Although still not stopping me being a nervous wreck

When DH and I were selling our BTL fiat a few years ago (as we had married and lived in my house) we offered the tenant first refusal and offered his last 12 months rent already paid as a discount. We were gaining as no estate agency fees and he was getting a discount. Maybe your LL will make it worth your while if he has no marketing to do.

I would ask your landlord to get 3 estate agent valuations (this will cost him nothing) and then take the middle valuation as the most realistic one. That is roughly the amount you should be paying him. Apart from the issue of the valuation, I don't see any problems with a private sale and think you should be pleased that he gave you first refusal on buying the property rather than just putting it on the open market.

@Twiglets1

I would ask your landlord to get 3 estate agent valuations (this will cost him nothing) and then take the middle valuation as the most realistic one. That is roughly the amount you should be paying him. Apart from the issue of the valuation, I don't see any problems with a private sale and think you should be pleased that he gave you first refusal on buying the property rather than just putting it on the open market.

I'd say you should be paying a bit less - the landlord will be saving estate agent fees (usually around 1.5-3%) & presumably charging you rent up until the sale completes (whereas they'd have to give you notice & potentially have an empty property for weeks/months before the sale went through). If you can find a few similar properties on the same or surrounding roads on Rightmove sold prices, that should give you a good idea of whether the price your landlord offers is a good deal or not.

I'll ask him about the valuations, I am hoping to push the price down for an easy sale.
I am concerned about the flood risk, the neighbours have assured me it has never flooded but there is always a first, but then I suppose any property could flood or have something wrong with it.

You said its a small village - could you buy another property in the area that was a lower flood risk?

As you say OP, there is always a risk whenever you buy a home! If you are assured you will get insurance this is a risk I personally would be prepared to take. Lots of luck!

It's also worth thinking about the massive benefit of owning rather than renting: the money you are paying goes to wards completely owning the house: you end up with something that is yours at the end!

Personally I'd be concerned about the flood plain. Water levels are rising. Some places could be completely submerged in the U.K. in the next 30 years if it continues.

www.countryliving.com/uk/news/a38142403/uk-areas-underwater-rising-sea-levels/