Mortgage stress -WWYD?

[Beachbaby5678]

We sold our first home last year in July 2022 as we were relocating to a different part of UK for partner’s job. To cut a long story short, the cost of childcare in south-east, painfully long commutes into London, the imminent arrival of DC2 and a looming remortgage all forced us to seek cheaper property areas. We decided to break the chain and move into rental whilst we searched. All in all we have loved being near the sea and the lifestyle that we have achieved as a family… but trying to navigate this current property market is almost finishing me off with stress.

Weve loved and lost 3 properties due to vendors pulling them off market and chains falling through. What with rental costs, storage costs, legal fees and surveys etc. we’ve spent over £9000 with no property to show for it. All this chaos forced us to reapply for a mortgage twice, playing havoc with our credit ratings and our budget.

Dud to the mortgage rate insanity and the CONSTANTLY changing goalposts of affordability, we can’t now afford the semi-detached family home we originally wanted and have downsized expectations to buying a 5 year house which will do us until we can sell on. Because of this we chose to prioritise area over and above space, on the basis that we could easily sell on, hopefully for at least the price we paid for it. Now we are finally very close to completion on this house and the survey has revealed structural problems
with The roof which will cost £20k to repair.

I am devastated. We don’t have £20k left in the budget to do this work, the seller or refusing to negotiate and our rental contract is about to end. We’ve already been informed that the landlord will be putting the rent up another £200 per month and this was already at the top of our budget. Our current mortgage deal is fixed at 4.25% (good in current market) but not transferable. If we walk away and have to secure a new mortgage it will be closer to 6.6% according to our broker.

I am really at a loss what to do next. Do we proceed with the house and bite the bullet on the roof repairs even though it was supposed to be a cheaper prospect? I’m seriously considering this really as all the other options seem pretty bleak now and we need to move ASAP. Or do we find another rental and try to wait out this current mortgage crisis? Will it even end or could things be even worse in 1-2 years? If we look for another house we’d need to adjust our budget even further (probably by £50k ) which would mean compromising on both place and space. I guess I’m just ranting and very tired after nearly a year of ‘trying’ to buy a house.

I agree with that also. Surveys of Edwardian/Victorian houses almost invariably say the roof may need replacing but unless a professional roofer has actually gone up there or unless they have evidence from a drone, it's guesswork really.

My daughter's survey on a Victorian conversion said the house would need a new roof imminently and the Sellers knocked 4k off her flat (costs of a new roof would be shared between the 4 flats in the house).

But now a drone has been used, they've been told the roof could easily last another 20 years or more.

Basically @Beachbaby5678 I think it's awful if your Sellers won't renegotiate at all. But despite that, given the good deal you have locked in, I would still buy the house and then pay to get your own roofer with a drone up there. It may not be as bad as the surveyor is suggesting.

Perhaps pay to get your own roofer up there with a drone BEFORE exchanging?

You have to get permission from the home owner before allowing a drone to take images of someone's roof and we couldn't get it from one of the flats as the owner was a BTL LL living overseas who had no interest in being cooperative. Maybe it could work for @Beachbaby5678 at this stage though.

Didn't know that. I should have guessed. But yes, seller may allow it if it helps secure the sale.

Seller may allow it but seeing as they are being so uncooperative re the perfectly reasonable request to negotiate on the price after a bad survey, they equally may not. Could be worth a try, though. But it will cost a few hundred to pay for a drone

I very much doubt it would cost a few hundred to pay a roofer to fly a drone over the house. It cost me £60 two years ago.

OP, I think you should also factor in the stress of having the roof done with a newborn and toddler. If two builders have independently said it needs major work I’d be inclined to believe them. So I think the decisions need to be based on that rather than hoping it doesn’t really need doing or doesn’t need doing now

https://dronesurveyservices.com/how-much-does-a-drone-roof-inspection-cost/#:~:text=The%20additional%20cost%20for%20a,to%20conduct%20a%20roof%20inspection.

A key problem here is that reduced affordability due to interest rate increases impacts buyers' budgets long before it works its way through into vendors' price expectations: you're experiencing the new reality of much higher borrowing costs today (or would be if you let your current historically-priced mortgage offer lapse) while it will take months and months and months of not being offered an acceptable sale price for some vendor's price expectations to similarly reset lower to the changed reality of the much higher rates we now have.

There is no "right" choice in difficult circumstances like this when you've so many different pressures and so many variables outside of your own control.

Personally, I'd take the approach described by @DrySherry above, but I'm not facing the pressures that you are and I have quite a strong view of the market's likely direction downwards as first higher borrowing costs and later a worsening labour market slowly but surely make themselves felt.

I’d negotiate with the seller or pull out if I were you, as where will you live whilst the roof is being repaired? The roof is essential, it’s not like it’s a minor thing that the survey has revealed.

You sound like you're in a strong position having sold at close to peak of market and now presumably with a largish deposit ready to go. How long will the 4.25% be fixed for? I'd do as previous poster suggested and pull out if they don't reduce (altho not clear what price band you're at so no idea what % £20k is.) As long as staying in rental means you won't be digging into your deposit and you can still save. This isn't your dream forever home and you could well end up stuck there with negative equity if market drops significantly, which depending on location is quite likely at moment. Plus even if you do move again you've got to factor in two lots of sdlt and moving costs etc. We bought 2009 and just after interest rates dropped further which helped prices recover - that's not going to happen this time round. House prices are naturally sticky and peak to trough could take two years or so,. Unless you've already negotiated a fantastic deal with the vendors they should be desperate to keep you.

In terms of hassle, IME having a roof replaced is one of the least intrusive of all major renovations.

Exactly. The builder have to leave it water tight every night anyway.

If you walk away you'll have costs of £200pm more, but borrowing an extra £20,000 at 4.4% would only cost an extra £73 per month. You'd be mad to walk away.

We lived in our house while the roof was replaced. You don't have to move out.

If you can't borrow the extra just yet, the roof will be fine for a few years and you may well be able to borrow it in 3 or 4 years time when rates are lower.

I don't think the BS would give you a mortgage on a property that is worth less than the valuation. The valuation will take into account the problem with the roof. If the property is valued at less than the vendor is asking pull out. Find a cheaper rental if you can and try to get a year. Mortgage rates may have peaked and be coming down by then.

No help with the cost or roof but I'd like to add that I lived in my rental when the roof was replaced, during a very wet and windy November with a storm added in.
Personally if you like the house then I would go ahead

Over what time period you doing that? £20k at 4.4% over 30 years is £101. But not sure OP can get the additional £20k added to mortgage at agreed rate anyway so might be more like 6% .

It sounds to me like the vendor doesn't want to sell... (divorce sale maybe?)

in my experience the vendor would either pay to have the roof repaired themselves or reduce the sale price by the estimated costs (they can get their own quotes).

They must realise other buyers' surveys will reveal the same results.

If it was me I would say the sale won't proceed unless they get the roof done or drop the price. Then it's for them to negotiate, maybe drop 10k.

Otherwise I would walk away.

Not saying this is best for op but it's what I would do