First Time Buyers..scary interest rates!

[EmmaBeee]

Hi all,

I am in a pickle and don't know what to do, me and my other half are buying our first home, about a month and a half ago we had an offer accepted on a house after looking for over a year for anything decent! The competition for the house was quite fierce and I think ours was accepted because we are first time buyers and the estate agent said would we be happy to be patient in letting the vendor find a new home to buy, which of course we said that's fine as we didnt have a house to sell ourselves we could wait. However, we were told by our mortgage advisor its best to get the mortgage application done as soon as possible, so we are just waiting for the offer to come back but then we will have 6 months until the offer expires.

If the interest rates weren't rising so quickly I wouldn't stress at all and would sit back and wait for the vendor to find somewhere. But in 6 months time our repayments could go up by another £300 a month at least and we won't be willing to pay that. The vendor hasn't found anywhere and I know the market is slow and we said we would wait but the change in interest rates is out of our control. On the one hand I feel terrible for potentially needing to put pressure on the vendor but otherwise we may have to pull out and it will all fall through.

I don't know what to do, what can i say to the estate agents to see if she would be willing to come up with another solution? How long should I give it before telling the estate agent this?

Help! This is all thats going through my mind all day everyday!

Go back to the agent and tell them what you've told us. You won't be the only ones.

Also start looking for another house. The buying frenzy has died down and things are being reduced, not going for over asking.

Ask if the vendors would be happy to 'break the chain' and move into rented.

Hi!!
I need to say this because what you wrote I could have written a few months ago myself! Exactly in the same situation, FTB got an offer in April and still waiting for the vendor to find the property. The offer expires in September - October so it's looking like we are very unlikely to complete before then. The purchase is falling through as I write this message. Please look for another property so you can be flexible and have a choice! and don't feel bad for pressing on the vendor! I feel like we have been to laid back. And as you said, the interest rates are making it impossible to carry on with the offer (at least in our case). Just checked with the mortgage advisor and if we were to re-apply for the same house right now with the increased rates, our monthly repayments on the same house would be 5/600 pounds more every month! That's a lot of money! So speaking from experience - chase it all up, and if you get some warning signs that the vendor is dragging her/his feet then unfortunately it might be tight to complete in 6 months (considering everything is still taking a long time to process!).
Good luck @EmmaBeee !! x

Yes, just tell the agent. The vendor can then decide what to do. Just say that it’s not a case of you being impatient, but that interest rates are forcing your hand. The vendor can then decide what to do. It’s not a new problem and anyone the vendor sells to will be in the same position.
the agents will be well used to dealing with this situation.

On the one hand I feel terrible for potentially needing to put pressure on the vendor

I doubt the vendor will be surprised - you can’t feel guilty about it! I’d imagine that they’re stressing similarly about rates going up. Being a FTB is nerve wracking at any time, never mind when rates are changing.

Yes, just update them on the situation.

@tithead22 true that!!

Thanks for the advice! We rang the estate agents yesterday just to plant the seed of needing to find an alternative solution if she doesn't find a house soon. We said we were concerned about the interest rates, do you think they will go back to the vendor and tell her we have rung and said we have chased it, and concerned about interest rates? or would they not tell her

@EmmaBeee In your shoes I’d have been a little firmer and explained you need to exchange and complete by X date before your mortgage offer expires, and ask the vendor to confirm they are agreeable to this timeframe either by finding a house or breaking the chain by going into a rented property. If not I’d make it clear that unfortunately you’ll need to consider withdrawing your offer/looking at other properties.

We're in a similar position as FTBs (offer accepted last month, currently awaiting mortgage offer, searches, enquiries...) and I asked the estate agent what the seller's situation is as we are going to need to give two months' notice on our rented flat. We have to move by 30 November and I said that, but actually the EA came back and said the vendor was willing to break chain for us and will move by 31 October at the latest. Just be as clear as possible about your situation, makes things much easier.

As the others have said, I would be clearer/ more direct.
Put it in an email.
You will need to complete before x date when your mortgage offer expires. Is the seller able to break the chain/ stick to your timeframe or not? If not, then you need to look for other properties. You also don't want to keep wasting money on a chain that isn't complete.
They know as well as you do that interest rates are rising. The agent will be concerned because the same will apply to a lot of their potential transactions at present so they should be working really hard to push things through as much as possible and communicate with others in the chain.

Agreed with others above - put it in an email. Something along the lines of you just wanted to follow up from your call last week and the vendor should be made aware that you will need to exchange by x date. You’ll pull out if there’s no sign of movement by x date. Spell it out to them. You’re at the bottom of the chain but that means if you pull out then none of the transactions can go ahead. We did this as FTBs when when the knob at the top of the chain kept changing his mind. I found out we were using the same solicitor and sent an email to solicitor and EA saying as much. All of a sudden we exchanged 🤷🏻‍♀️

Sorry to jump on this one. I'm in the same boat, only the chain is complete. Small chain,, my vendors awaiting probate on their onward purchase. Everything done, we have agreed completion date but still no sign of probate. They won't break chain, but are chasing every day on the grant. Keep being told "any day now". If we don't get it in 2 weeks (and everyone seems to be confident we well, except me!) my payments will go up significantly. Sort of stuck now, even if I start looking for another purchase I would still be in the same situation.

We are still waiting for the vendor to find somewhere, spoke to the estate agents today and they said they keep sending her properties but none of them are good enough, I have seen a property for sale though that looks exactly like what the estate agents said she wanted! it only came up for sale yesterday, do I take it it is unreasonable to send it to the estate agents and say has she considered that one?

I wouldn’t do that, it will likely only get the EAs back up - and you want them on your side. Bear in mind that August is a slow month for the housing market - almost as bad as January.
If I were you I’d keep searching for other properties for yourselves and not pay out any money for anything related to the offer accepted property. Put offers in elsewhere if you find somewhere that you like.
We had this with a property we liked, and had noticed that it has come back on the market 4 times in that last 9 months- the EA basically said they keep losing their buyer because they can’t find somewhere to move to (what they wanted in a particular area didn’t exist in their price range and they wouldn’t accept that).

@JohnNutLips thats what i thought, we are viewing others but nothing compares at the moment

Don’t withdraw your offer. But do look for chain free houses. We had the same situation- vendors constantly viewed houses and nothing was ever good enough. We found a chain free house and ditched them. Our surveyor actually asked if the house was chain free, saying he won’t survey houses in incomplete chains now because usually the vendors don’t find onward purchases due to lack of stock and he doesn’t want people wasting their money!

It may we worth checking if you can port the same mortgage rate to another property , if you decide not to proceed with this house. We got a good rate with nationwide a few months ago, before the rates went up. Unfortunately had to pull out of the original house purchase due to survey problems. We have since found another house for less money, but nationwide won’t let us keep the previous more favourable rate. So we are now shopping around again for the best rate but it’s quite a bit more than it was before so repayments are going to be higher even though the house is costing less.

The nationwide rate was also valid until December too, but only on the first house 😒