Buyer wants us in rented - seems a colossal waste of money

[ChainStress]

Our buyer is eager to move into our house but our vendor isn’t ready and doesn’t seem to be in a rush. Buyer has asked us to go into rented while we wait for our vendor. But the maths on this isn’t great.

Current outgoings - £1700/month on a low interest mortgage comprised approximately £1350 mortgage, approx £350 interest.

Potential rental - at least £2250 (we have three kids and both work from home - we need at least 4 beds). So each month we’d lose £1350 on rent that could have paid off our mortgage loan plus an additional £800 in rent (£2500 rent - £1700 current monthly outgoing).

Over 6 months that would cost us £12,900, plus another £3000 in additional removal costs. About £16k all together! And if it falls through with our vendor we’re stuck for even longer in an expensive rental paying off someone else’s mortgage until we find a house.

What am I missing? Why are people willing to break the chain if it’s so expensive?

This is probably not relevant to you OP given your likely choice, but if porting (a good rate) mortgage to your new home then you may only have 6 months grace between selling your own home and purchasing the next.

I wouldn't because it could fall through and you're stuck paying for a rental. I'd ask the solicitor to contact theirs and ask for a time scale.

6 months is minimum rental term. In some cases 12 months.
doesnt matter if it’s only 2 months needed, they’ll still be paying for 6 months

Start looking for another property to buy, and let your vendor know you are doing so.

This. The vendor doesn’t sound serious so alarm bells would ring with me!

This is the issue. I looked at temporary lettings (e.g Airbnb) and in our city that would be £4000/month for a 2 bed flat (for 3 kids and 2 adults who work from home).

I don’t think I would consider a 2 bed flat for a family of 5 op.

Why dont you issue an ultimatum? They come up with a proceedable plan B by Friday or you are out.

I would be getting very tough with them at this point.

When did you accept the buyer's offer?

I would start looking at other houses to buy at the same time as putting pressure on the vendor to give you a firm date as your offer will go if your buyer goes

I will never understand why settlement takes so long in the UK.

There needs to be a complete overhaul of the process. It shouldn’t take months.

Yeah. I am familiar with 2 different countries systems and honestly, the long winded faff here is too much. Main issue is uncertainty as well with non existent contract about future contract type of thing when people get locked in early and can't mess about without some penalty.
I am still astounded that people in England are asked to spend money without any kind of security that spend will result in property purchase.

Just another perspective - we moved into rented with two young DC and it was absolutely fine.
context - we’d had 2 chains break down with vendors pulling out and we were at the end of our tether! We’d then sold our house but not found anywhere to go.
We took a tenancy out on the cheapest house we could get away with so downsized to a 3 bed terraced from a 4 bed detached. Paid for the removal company to pack us up. Left everything but the essentials in boxes, stored some of our furniture.
We only ended up being there 3 months, luckily we had a great letting agency who didn’t hold us to the 6 month contract as they managed to let it again straight away. It also meant we had a bit of an overlap with getting the keys to our new place so we could get in to clean and do bits before moving in.
I’d definitely do it again if it meant we didn’t lose out on a house we desperately wanted. IMO it’s unreasonable to expect buyers to wait more than a month or so before everyone is ready to proceed. If someone in the chain is still looking at this point then they need to pull out or move into rented.

I wouldn't trust such dithering vendors so I'd be looking for a different house to buy.

I might consider renting depending on on how hard it is to find a buyer.

Same here. They do it to stop time wasters who haven’t got anything better to do. New builds want to see evidence that your property is sold before they even let you see show homes.

OP, in your case I would be concerned that your vendors may decide they don’t want to sell after all and you will end up without a buyer and a seller. The fact you say they are in no hurry sounds alarm bells.

I've been in your position several times, a couple of times it was because our new build wasn't ready but latterly our vendor just hadn't got enough of a move on.

It was nigh on impossible to get short term rented accommodation for 2 adults, 3 children, 2 dogs 2 cats and assorted pets. Twice we were lucky enough to know someone who had an empty property that let us camp in it for a few months. The other twice we moved in with my parents for a month which was hell.

Since my divorce I've moved twice, both times with 3 older teens/young adults who weren't home but still had a home there so had to put everything into storage and move back with parents/in with a friend. It was horrible even on my own BUT I would have lost my buyer if I hadn't so had to suck it up. It really pisses me off that I'm always the one who has to put myself out but you have to weight up the risks of losing your buyer to the inconvenience caused by renting.

I can see why your buyer is worried. Your vendor seems to be in no hurry to move and could be one of those awful timewasters testing the market. How long since they accepted your offer?

I would rent as cheaply as possible and muddle through - even if that’s sleeping in a living room on the camping mattress

I would also be looking at another forward purchase and of course you can always ask if your onward would move to rented to get things moving

6 months is the shortest amount of time you can rent for

Main issue is the mortgage lenders. Been through it on both ends where mortgage lender asks for 1 piece of documentation at a time and won’t send you a list of what they need. It takes 3 days to process 1 document. They need around 50 things and by the time they get to the end some of the documents are too old to use

It could be hurried up but banks don’t seem to want to make things quicker and the actual issue with only having any sort of guarantee of a sale is right at the end and it is then usually 28 days where you know you have sold and you can bid on your next place with certainty

Our last house from when we accepted an offer, it took our buyers mortgage lenders so long to get all the paperwork together (given the bank was a high street name you would expect a more streamlined lined approach)

Buyers got their mortgage in place, We exchanged contracts then was told that the bank needed to do a survey and it was booked for weeks after we had completed.

There were no issues on mine or my buyers parts. We had completed all the paperwork and it was sent back within 24 hours. It took over 7 months to get to the stage of completing all the paperwork and them getting their mortgage acceptance letter.

If we had waited for the survey and report and then the mortgage offer it would have taken at least 9 months possible a year - to get the mortgage offer in place.

No it's not

I think the Scottish system is much better.

op Airbnb is prob the most expensive way to do it. We have companies here that offer short lets. Or any lettings agency will be able to help. I feel for you. It’s a really wobbly market and having a good buyer in these conditions is not a small achievement. I’m very worried about the data coming out today.

This seems incredibly unlikely given most estate agents and buyers don’t want offers from people who still have a property to sell.
You’ve got it the wrong way around.

Only you can decide if you feel renting would be worthwhile in you position. Personally, I wouldn't, but it also depends on how long your buyers have been waiting.

Many years ago in 2013, my parents found themselves in a similar position. They'd found a bungalow they really liked, so put their house on the market and received an offer. Then, the bungalow they wanted fell through, so my parents had a buyer, but nowhere to go to. At the time, my parents were mortgage free and were planning to use inheritance money to top up the value to allow them to buy a bungalow. Obviously, renting would potentially have used a lot of that money and could have left them without enough to buy with. They also wanted to buy the right bungalow for them, so didn't want to just move anywhere to get the house purchase done. Fortunately, they found a bungalow about three months after finding a buyer and the buyers were first time buyers living with family at the time, so we're happy to wait.

I'm only posting this to say that maybe OP's vender is in a similar position, so it depends how long they've already waited.