I'm rly stressed out with selling our house and would rly appreciate some advice.
We had 2 offers on Saturday. One at asking price with a FTB who already has his finance in place (had another house, everything ready to go, place fell through). Had another offer with another agent of £5,000 more than the asking price. That buyer is in a chain (him and 2 others). He only had an offer on Friday so nothing's been done there; that person hasn't had anything sorted on his sale either as the FTBs buying his house have only just got their mortgage sorted (no valuation carried out yet).
The FTBs cannot/would not offer above the asking price so the estate agent offered to knock £1,000 off their fees to secure the sale.
I've accepted the FTB's offer purely because it's secure and they're ready to go. He's going to his IFA today and will pay the new valuation fee immediately so fingers crossed we should have the survey booked in next week.
I haven't found anywhere to go and am now panicing that I've made the wrong decision as maybe the FTBs will get impatient and drop out.
But I'm rly worried now that I've made the wrong decision as perhaps the FTBs will get impatient waiting for me to move and go elsewhere.
If you are that keen to secure this buyer, move into rented. That is what two neighbours of mine have done.
You're right, the ftb may become impatient because he's ready to go and he doesn't want to waste time hanging around for another purchase which might fall through.
Why not agree between you a mutually acceptable timescale for exchange, in order for you to hopefully find a property to buy but not test his patience too much; if you can't find somewhere in that timescale, you agree to rent.
I agree. He's ready to go and you want to sell. How disappointing would it be if you accepted the higher offer and then had to sit there while they couldn't sell their property? I think you've done absolutely the right thing and so has the FTB by refusing to go over asking price.
Start your househunting with earnest right now, you never know if you might find something that really appeals. Otherwise, let the FTB carry on and arrange to rent somewhere. Bear in mind that although that will mean 2 moves it will also mean that you are in a position to take your time finding the right property for you. Once surveys are sorted and it all seems to be hunky dory start your decluttering (good incentive if you know you'll be moving twice!).
*It is not necessary to understand things in order to argue about them. -- Pierre De Beaumarchais
I agree with the others. Don't keep the FTB waiting too long.
I sold a house to a FTB a few years ago and then took more than 3 months to find a house that I liked. Virtually the same day that I said I was ready to proceed the FTB's found another house they liked which was cheaper and they therefore pulled out!
Yes, you did the right thing... As suggested above, you can always rent. That will give you the freedom to meet whatever time scale the FTB can make, and to settel somewhere you are not tied to whilst finding the home that truly suits you.
Ary.
-------------------------------------- ***Do not, I repeat Do NOT feed the Trolls! *** *** All Hail the mighty hamsters! ***
Well I would rather rent than lose a good buyer or rush into my own purchase. Even if you find the perfect place to buy tomorrow who's to say there won't be an upward chain and therefore delays while your vendor and then his vendor get suited?
Not only would I rather rent but I am actually renting after the sale of my old place to a chain free buyer. There are downsides of course but if you choose the rental carefully and don't stint there are upsides too. So far I've had the fun of a sea view near my old location and a try out at a new location. The relocation hasn't gone that well, I'm not really happy here so am grateful that it's just a rental and I can easily move on again once I've figured out where to try next.
I concur with all above - definitely the right choice. Wouldn't panic about timescale too much - try talking to the FTB, explain your situation and enquire as to his/their expectations. Unless they are buying new build, most other vendors will be in the same position as you, especially if you are in a property hotspot (and sounds like it if someone offered over asking).
My recent sale was to a 2nd timer who had sold to a FTB who had already been waiting 3 months when he offered on mine (then it took me 3 months to exhange). FTB were a pain at the final hurdle, but we got there (just).
Moving into rented seems like a lot of hassle to me, but a lot of folk do it.
------------------------------ 35% constitutes neither a majority nor a mandate
renting is a hassle. It can be hard to tie up the end of a 6 month rental with a purchase. If you were looking to buy then you pretty well much need to start looking straight away once in to the rental so there isn't a whole lot of scope for relaxing and enjoying the ambience of an area. In some instances it can make you an attractive buyer but certianly not all. I only did it becasue I really had to.
Originally posted by ReenyMc: renting is a hassle.
So is losing a good buyer due to delays in the chain but buying in a hurry and regretting it later is even worse.
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Originally posted by ReenyMc: It can be hard to tie up the end of a 6 month rental with a purchase.
Yes, so the best thing is to enquire if you can go onto a periodic tenancy after the first six months BEFORE you sign up to the property. Then you will only need to give a months notice. Also enquire after the landlords plans, if they are planning to sell up then don't take that property. If you explain what you are wanting and why I think you will find most letting agents/landlords will try to help you.
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Originally posted by ReenyMc: If you were looking to buy then you pretty well much need to start looking straight away once in to the rental so there isn't a whole lot of scope for relaxing and enjoying the ambience of an area.
No you don't, I haven't even started looking and don't intend to yet.
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Originally posted by ReenyMc: In some instances it can make you an attractive buyer but certianly not all. I only did it becasue I really had to.
And the your offer to buy that had been rejected six months ago was accepted saving you what was it 50K? And even though you had just signed for a new six month term and then needed to move unexpectedly quickly you were able to find a replacement tenant to take over so you didn't have to pay rent after moving out.
I have never rented, I begrudge lining someone else's pocket, although if I could have got a council place I would have done that rather than take on a mortgage when I was such a young age.
Originally posted by stateofplay: I have never rented, I begrudge lining someone else's pocket, although if I could have got a council place I would have done that rather than take on a mortgage when I was such a young age.
I don't think long term renting is a good idea, but short term it can be extremely useful depending on what house prices are doing.
These days round here you would hardly be lining someone else's pocket as rental yields of recently purchased properties I've viewed or rented range from 3.48% to 4.38%. Thats cheaper than the interest part of the mortgage so in effect the landlord would be subsidising you!
If the landlord purchased his rental 20 years ago for peanuts so much the better as there's more chance of getting it a lower rent. Besides does that really matter if it enables you to secure a good deal on your sale and subsequent delayed purchase?
So long as you are renting for the same or less than the mortgage interest would be if you were to buy the property today and it helps your own sale and purchase then you are going to be ahead financially no matter what the landlord's position is.
One of my friends rented for about 6 years, he was waiting for his credit to imrove. He moved all the time, mostly because his landlord(s) gave notice, mainly because they were selling.
I am not like him, I can't continually move. I like to have my feet firmly rooted. It used to amaze me how many times he would pack up a lorry with all his and his families belongings.
Still, each to their own!
As for "the landlord subsidising you!" I do not understand your reverse logic! I would love to go through the figures with you!
Originally posted by stateofplay: One of my friends rented for about 6 years, he was waiting for his credit to imrove. He moved all the time, mostly because his landlord(s) gave notice, mainly because they were selling.
The renting suggestion here is for someone who wants to break a housing chain, so I don't think that would entail anything like six years renting (although I'd be happy to do that if house prices continued to drop over that period, but that's another discussion).
The landlords selling is a good point and I think it's one of the biggest problems facing renters these days. There's bound to be a lot of selling especially if interest rates rise and/or prices slide. I don't see how the low rental yields we're seeing these days are viable.
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Originally posted by stateofplay: As for "the landlord subsidising you!" I do not understand your reverse logic! I would love to go through the figures with you!
Well take the yields I mentioned earlier. These are gross yields against the purchase price from www.houseprices.co.uk. This means they are the return the landlord is getting on the sum he has invested/borrowed before expenses and tax.
Taking the specific example of my last rental:
Purchase price 200,000. Rent 675 pcm which is 8,100 per year. Yield 8,100 / 200,000 = 4.05%
Now the landlord also pays out ground rent 75 and service charges 460 per year. Buildings insurance and repairs, I'll estimate my landlord spent about 50pcm on these last year. So that's costs of about 94 pcm that he pays and the renter doesn't.
So if I was to buy the flat I'd have 675-94 = 581pcm to pay the interest on the mortgage, I'd need a loan at less than 3.5% interest only to break even. If the loan rate is any higher the landlord is subsidising me because he is providing the flat(200K) at a lower rate then I's have to pay in interest to borrow the 200K.
In practise if buying I'd put down a deposit, but while renting I still have that same cash earning interest in a deposit account.
Also in practise I'd have a repayment mortgage which would make the monthly mortgage repayments higher. The extra cash goes towards paying off the mortgage so it's fairer to compare the rental against an interest only mortgage - neither of these monthly payments are actually going towards buying. To be in the same position as a repayment mortgage holder I'd just have to save the extra "repayment part" each month to put towards my eventual house purchase.
Apologies for the long post but you did ask for the figures
Your figures assume the property was purchased recently, if it had been purchased 5 years ago, it would have cost £100,000, making a rental yield of 8.1%. It is rare for any landlord to subsidise his tenants, only as in your example, it would have to be a newbie to the property rental market, i.e the property was purchased very recently.
I have no arguement about whether it is cheaper for you to rent or buy, in today's market it is cheaper to rent. 5 years ago, it was cheaper to buy. But your comment that Landlord's are subsidising you assumes that the landlord was mad enough to buy a property at full market value at the peak of property prices.
I considered selling up last year and renting. I thought prices may fall, and I would re-enter the property market and snap up a bargain. Some of the reasons I decided not to include;
The savings would attract 4.5% at best. I am a tax payer, so I would get 3.6% net.
If house prices did rise, my savings would not keep up. As it happens, in my area the prices have just shot up, the house I offered on in October would now be £20-£30k more today. I bought for £185k, two identical properties in my road, one next door, the other 6 doors away, have just sold for £215k and £218k. This may seem extreme, but this is what I was worried about, and it actually happened.
I was put off renting by the thought of having to move all the time, and not being able to add value to the property because it's not mine.
But anyway, all this talk of yields and stuff is irrelevant, I wanted a home to live in, and I decided this would be my last move, I intend living here until I retire. But, you never know, I seem to get itchy feet as I have purchased and moved to 7 places in just 12 years! Maybe I am a nomad at heart!
Originally posted by stateofplay: Your figures assume the property was purchased recently, if it had been purchased 5 years ago, it would have cost £100,000, making a rental yield of 8.1%. It is rare for any landlord to subsidise his tenants, only as in your example, it would have to be a newbie to the property rental market, i.e the property was purchased very recently.
As it happens the property was purchased recently, but I don't really see why that changes the worth the property has to me as a tenant.
Say I've been renting the flat for six months. So what if the landlord did buy it 5 years ago for 100K would I be getting worse value for money? If he then sold it yesterday to a new landlord for 200K and I am still there paying the same rent would I be getting better value for money? I think not, it's still the same flat with the same rent and the same market value.
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Originally posted by stateofplay: I have no arguement about whether it is cheaper for you to rent or buy, in today's market it is cheaper to rent. 5 years ago, it was cheaper to buy. But your comment that Landlord's are subsidising you assumes that the landlord was mad enough to buy a property at full market value at the peak of property prices.
The landlords personal finances make no difference, he's still giving me the use of his asset "worth" 200K for the same rent which is considerably less than the interest on borrowing that money would be. I don't mind how efficiently he uses his asset. Had he brought it 40 years ago for 3K and was today charging me rent of 25pcm by your definition that's a massive yield of 10%! Would you still say he wasn't subsiding me? Clearly you do need to take todays market value of the asset into account.
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Originally posted by stateofplay: But anyway, all this talk of yields and stuff is irrelevant, I wanted a home to live in, and I decided this would be my last move, I intend living here until I retire. But, you never know, I seem to get itchy feet as I have purchased and moved to 7 places in just 12 years! Maybe I am a nomad at heart!
On this thread we are taking about renting to break a chain to assist in the sale and later purchase of a property, which can add value if it means getting a better price or preventing delays to avoid the FTB pulling out. I was trying to point out that renting can be good value for money during the wait. I'm not talking of it as a permanent replacement to buying. That said purchasing 7 places in just 12 years must have cost you a fortune in stamp duty, fees and moving costs. If you really are a nomad at heart maybe it now would be a good time for you to give renting a try
No chance, I have made bucket loads of money from ownership, the fees are a drop in the ocean.
If in 1974 you had bought a house for £30k, it would be worth £520k in today's market. Without doing any improvements, just maintenance.
If you had rented in 1974, and had put your £30k into a building society, today it would be worth £126k. After Gordon Brown has his slice, it is actually £100800.
So, short term renting I can accept as good advice. Long term, or if the market is moving, not good advice.
I can see how you think you are being subsidised, but in the long term the owner is the winner. An interest only mortgae for £200000 is about £665 a month from any reputable lender, £10 saving, I won't spend it all at once!
However, if I did a BTL, £150000 mortgage would cost £498 pm, and my £50k deposit would lose me my interest I could be earning from ING, £150 a month. That's £648.
Originally posted by stateofplay: I can see how you think you are being subsidised, but in the long term the owner is the winner.
A winner due to past gains in house prices I presume as we agree rental yields against todays market value are poor. Well what difference does that make to me or the originator of this thread. Both of us have been house owners, in my most recent case from 94-04 so I have pocketed profits from this boom and have withdrawn them in case they disappear when rates rise. Since I sold up prices there fell until the end of 04, flatlined in 05 but with a drop in volume of sales and in spite of asking prices going up this spring there have been only a minority of properties going under offer and practically no sales going through to completion in the sector of the market I sold in. But isn't investing in an overpriced asset of poor yield with the expectation of future gains based on the huge rises of the recent past getting into the irrational exuberance of a bubble.
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Originally posted by stateofplay: An interest only mortgae for £200000 is about £665 a month from any reputable lender, £10 saving, I won't spend it all at once!
I think you may have to it needs to cover the 94pcm for the flat's maintenance charge, ground rent, window cleaning, and any other repairs than happen along (the dishwasher repair alone was £300, shower leaks were three plumbers visits I don't know what they cost). As I said before the flat's maintenance charge and ground rent alone is 44pcm before you even start.
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Originally posted by stateofplay: However, if I did a BTL, £150000 mortgage would cost £498 pm, and my £50k deposit would lose me my interest I could be earning from ING, £150 a month. That's £648.
Am not quite sure what point you are making here, but as a landlord in addition to the costs mentioned above you will need to pay for any periods the property is empty and letting agents fees or your own management time and advertising. £27pcm isn't going anywhere near to covering it. And you are relying on a BTL mortgage rate of 4%, 0.5% below the current base rate, I wonder how long that will last!
But I make my main relevant point to this thread again, renting to break a chain to assist in the sale and later purchase of a property can be a cracking good deal at the moment.
I suppose what I am saying is that if you had bought the property rather than renting it;
Purchase price in Jan 2004 £200000 Value March 2006 £217813
Potential gain £17813 less Stamp duty £2000 Fees £1000 Maintenance charge £1144 Net potential profit £13669
As your mortgage payment would be about £665, and that was because 3.99% fixed rates were available in 2004. Lets say you didn't get a 3.99% fixed, but went for a tracker instead, £815 per month. So, assuming you have saved paying rent at £675 per month, you would have paid £3900 more in mortgage payments versus rent.
£13669, less your extra expense on mortgage leaves £9769. So, you have rented at £675 per month, and when you move out, you will have nothing to show for it, whereas if you had bought and then moved out, you would have £9769 less EA fees as a little sweetener for living there.
The price rise from 2004 to 2006 (26 months) is based upon the HPI.
Well, I am not too sure your landlord is subsidising you. He sounds like a jolly nice chap though!
What's the fuss. Property always was and always will be a good investment. If you can't afford to buy then rent is just fine, if you can afford to buy then you are daft not to, unless you have some short term plan or other.
Rental yields for landlords are all based upon them buying a property either years ago or with cash or a very large deposit. Buying right now to rent out is nonsensical. No serious landlord would ever consider having a 90% or higher mortgage against a rental property. Those who are doing it have been watching too many tv programmes and imagining that it's a quick easy buck to make.
Nothing in life is a piece of cake. Unless you've been handed a gateaux that is.
*It is not necessary to understand things in order to argue about them. -- Pierre De Beaumarchais
Purchase price in Jan 2004 £200000 Value March 2006 £217813
Where do you get the value in March 2006 from? The flat next door has been up for sale since April 2004 and still unsold despite dropping the asking price hugely. Since then two of the down stairs flats have gone up for sale with no takers. So that's three out of eight up for sale, one for two years, one for six months and the last for a month. The first two have both dropped asking prices. My own landlord only rented his flat out in the first place as he couldn't sell it after nine months of trying!
All Hail the mighty hamsters! 
