House hunting and feeling dejected

[TrashPandas]

I'm trying to buy my first house in Scotland and getting so dejected. Everything is going for well over the valuation/home report price, and I don't have £30k sitting in the bank to offer over and above the mortgage deposit. The last place I offered on went for a full £45k above valuation.

It's looking like the only way I'll get something is if it's in a horrible area, or it's so run down that it needs £££s of repairs. And again, once I've put down a deposit I won't have all that cash for home improvements. I don't care if the place is horribly decorated or outdated, but even properties in full 70s decor are going for above valuation.

Is there any hope of the market cooling down soon?

Lots of people are buying new ATM where I am a new development has almost sold out and half of the scheme hasn't started 🤔 my own Dd is looking to move qnd everything they have gone for is thousands over the asking price. I hope you get something

I meant 10s of thousands over* where are you looking are you tied to your area could you go further away and commute maybe.

you havent said where your looking but you might have to expand your search area

If you wait long enough there will be a crash in house prices the closer it gets to any possible referendum. Genuine advice, if you can afford to wait, don’t buy now.

I would wait OP.
Cost of living rocketing and all the uncertainty 2nd referendum brings.
I think housing market will see big changes in not too distant future

I know of a fab walk in condition flat in leafy Edinburgh that only got three viewers this past fortnight. One of them offered 5% over valuation and got it .There is hope OP

I'm VERY flexible location-wise - anywhere within an hour's drive of my company's office in Glasgow. In any direction.

It looks like waiting is the answer. I feel like I've been waiting forever for a market crash, and it only ever seems to get more and more expensive. In the meantime I'll carry on saving. By about the year 2405 I might be able to compete with some of these offers...

Thank you for the kind messages by the way. I'm wallowing in self-pity but will try to be grateful I have a home, even if I don't own it!

Hi op, generally houses go for five to ten percent over thr valuation in Scotland, so it would be worth looking at houses below your max.

Is that always the case Swimming, or just because the market is hot at the moment?

I didn't want to make my OP too long, but my big mistake was saving for a deposit using a Lifetime ISA. I didn't know how mortgages worked (I'm from a very poor background and my friends/family all rent) and I thought I could get a mortgage for any amount, as long as I had 10% of it saved as a deposit. A friend set me straight, that I can only get a mortgage for the home report price, and any offers over have to be paid in cash. All my savings are in the LISA which can only be used for the deposit.

I'm now saving in a regular account but it's going to take a while before I can build up £15k+ and have any chance of a competitive bid.

I might be wrong here but your deposit csn be more than 10% can it not? so your mortgage is 90% of home report value but your deposit could be 30% of the sale price?

im not being clear but home report value £100k, you offer £120k. Mortgage £90k and rest paid as your deposit?

Maybe approach some new homes sites - you will get a deal if they have any 'stock plots' as they have to shift them before they release the next ones. Often this is where you will get upgrades etc free too. You will be paying a premium for the house but they are still increasing in value too - I bought mine 18 months ago and its worth about £20k more than I paid for it. Considering its a newbuild thats pretty good.
Can't see the market going backwards to be honest as more schemes are due to be released to help people get on the market and cost of living won't affect the upper end of the market so much.
Sometimes owners will pick people due to their circumstances over money too especially if it was a family home. Make sure you are registered with all the agents around where you are looking too - some of them will say just look on rightmove but others send out emails before a property goes live so you might have some luck there!
Good luck 🤗

This is a few years old but seems to indicate you can

forums.moneysavingexpert.com/discussion/5964791/ftb-using-a-lisa-in-scotland

your deposit can be as much as you want - there are even some mortgages available with as little as 5% deposit but then the cost per month is very high and not many lenders are offering these at the moment. You will get better rates with a 10%+ deposit and it used to be better, the better loan to value you had (as in the more deposit you put down) but there doesn't seem to be much benefit in terms of a better rate for the more you put down at the moment. All comes down to affordability and what you want your monthly costs to be essentially if you have the cash to go over the 10% deposit. (Hopefully that makes sense?!)

And yes this one is even clearer and recent

www.reddit.com/r/UKPersonalFinance/comments/m5icrz/offering_over_home_report_can_this_money_be_in/?utm_source=share&utm_medium=ios_app&utm_name=iossmf

I've always bought fixer-uppers. You can do the work gradually over time and it's a good way to build equity with creative expression.

RJnomore1 I thought the deposit went to the bank as a % of the mortgage price? So if the valuation is £100k, I can put down a 30% deposit but I can still only offer £100k, because the bank will only lend me the other £70k. If I want to offer £120k I need to give the bank £12k as a 10% deposit, and then pay £20k separately to the vendor. Have I still got it totally wrong?

Queenie900 That's good advice, thank you!

MintJulia I can do that if the work needed isn't urgent. Like I don't care if the bathroom and kitchen are ugly as hell as long as everything works, but I can't afford to immediately replace a non-working boiler, plumbing, electrics, etc. I've looked at places that clearly haven't been updated in 40 years and they still go for over valuation.

No! None of the deposit goes to the bank it goes to the seller.
So

you pay £120k. You have £30k - goes straight to the seller. The bank release £90k to your solicitor as a loan which goes to the seller.

Oh god, I'm a total idiot. So I CAN offer more?

Brb phoning a conveyancer...

So in that case though. If the home report value is £100k the bank will only offer a mortgage on that value. So would offer 90% of £100k. If you agree to pay £120k you must have the rest of the money in your LISA.

Do you have a mortgage broker?

I don't have a broker, but I have a mortgage in principle from both banks I use - the one with my LISA and the one with my current account. The second one is actually a 5% mortgage.

I'm now trying to do the maths to work out what I can offer 😅

You need a broker. Don’t just go to the banks you bank with.

Can I suggest London and country. They are free and gave me great advice in the past, they can also sometimes get better rates etc than on the open market.

Do I speak to a broker after I've had an offer accepted (STC)?

Thank you for giving me a Mortgages for Dummies course. I really appreciate it. I have looked this up and read a lot but it's all so alien to me...