Please help me make a decision about buying houses

[Thora]

Background is we had accepted we would likely never be able to buy a house (3 kids and live in a fairly expensive area) but about a year ago a relative found themselves in a position to lend us a big chunk of money for a deposit.
We discovered that with the mortgage we could get we could (at the time) probably afford a 4 bed terrace and we looked at a few.

Our wish list for the perfect house is: 4 beds, separate dining room, downstairs toilet, utility room, garage.

We found a house with everything except the utility within our budget, but after 6 months of messing us around the vendors changed their mind the day before exchange

When we found ourselves looking again in the summer prices had rocketed, but we found a 3/4 bed terrace - no dining room or utility - but still a great house. 5 months later the chain collapsed once and now the vendor is moving to a new build and wants us to exchange now, but not complete until the new build is ready which could be May/June.
We're nervous about such a long gap between exchange and completion, our mortgage offer runs out in April, and we don't really have any protection against the vendor pulling out
House prices has risen even more and I'd imagine the vendor could get at least another £20k now for her house than she's accepted from us.

So, I've looked again and found another house. Chain free. Cheaper, perfect location for us but smaller. 3 beds, no garage/office/utility/downstairs bathroom.
The house we are in the process of buying is about 100m2, the one we're currently renting is about 95m2, this one is only 80m2.

I feel paralysed with indecision. I'm so sick of looking at houses now. I don't know if we should hold on for the house we're currently purchasing and just hope it all happens. Or should we just buy this smaller chain-free one? At least we would own a house but is it too many compromises...

Our rent is really expensive and obviously we're paying ££££ every month to the landlord's mortgage, whereas a mortgage would save us a good £150 a month.

 

[prunus]

Once you've exchanged the vendor can't really pull out (well, they can, but it's unusual, and you can sue them for consequential losses), so that worry isn't one to have if you go down the route they want. You both get certainty (which the vendor is desperate for as well because they've committed to completing on the new build as soon as it's finished!).

You'd want to update your mortgage offer to extend to past the date set for completion before exchanging though, just in case. Speak to whoever is arranging it for you (ie either a broker or a bank mortgage person direct I would guess?) and explain the situation.

 

[baldrick]

I would see if you can extend the mortgage offer first and assume May/June means July/August.

I don't think I would exchange though. If something happens and the new build is delayed further & you can't get a mortgage or the new mortgage you're offered is unfavourable that puts you in a shit position.

I would be prepared to agree to wait and discuss exchange when there's some certainty on their house being ready.

 

[platinumsage]

Surely you'd exchange with a fixed completion date. If their new-build isn't ready by that date they'd still need to move out and rent somewhere or live with friends/family.

Sounds like a good idea if your mortgage offer can be extended, but what does your solicitior say on the matter - I'd be guided by them.

 

[Thora]

We've tried extending the mortgage offer but we'd have to reapply from scratch.

I'm worried about waiting and there being more delays, we're spending more money on rent, one of us could lose our jobs or something in the mean time...

We've asked the vendor to complete by beginning of April and have offered to pay towards her costs for storage/rental but she's not budging. She knows she could sell her house again pretty quickly and for more money.

I'm worried if we wait and it does fall through, we'll then be priced out completely.

 

[Thora]

Surely you'd exchange with a fixed completion date. If their new-build isn't ready by that date they'd still need to move out and rent somewhere or live with friends/family.

Sounds like a good idea if your mortgage offer can be extended, but what does your solicitior say on the matter - I'd be guided by them.

No, vendor has refused to set a date. It would be exchange and then complete when she is ready, whenever that might be.

 

[friedaweed]

Not sure I'd exchange now after our experience. We ended up staying in rented for over a year after being told we need to be ready to move after 56 days of exchange. It's the most stressy thing I've ever done.

Don't give up chuck.

 

[Glitter]

If she wants to exchange she’ll then have to complete and if that house suits what you need better I think I’d go for it. Yes, she’s being a dick about it but she holds the cards.

Speak to the bank about the mortgage offer and see if they can advise you?

 

[Thora]

So do you think I should make an offer on the smaller house?

To be honest, if a year ago you'd have told us we could buy that house we'd have been over the moon. It's only because we've had the opportunity to buy something bigger in the interim that it looks like a compromise.

It has less bedroom floorspace than our current rented house, but more living space.
It would mean two children sharing a room.
It's in a perfect location - 5 minutes walk to my parents, 15 minutes to all three children's schools. Lots of green space around it.
It has already been extended though so not sure we could add any space. Maybe scope for a small side extension to put in a utility room & downstairs toilet.

 

[Epico]

No, vendor has refused to set a date. It would be exchange and then complete when she is ready, whenever that might be.

That could be a while, you would surely need some semblance of a date to work towards. She needs to be aware that if you pull out before exchanging - that affects her onward purchase.

How good/bad is your conveyancer?

 

[Thora]

If she wants to exchange she’ll then have to complete and if that house suits what you need better I think I’d go for it. Yes, she’s being a dick about it but she holds the cards.

Speak to the bank about the mortgage offer and see if they can advise you?

Do you think we should hang on? I'm totally torn between hanging on and hoping for the best and going for something quicker but less perfect.

We need to reapply for the mortgage. I guess before we actually exchange.

 

[Thora]

That could be a while, you would surely need some semblance of a date to work towards. She needs to be aware that if you pull out before exchanging - that affects her onward purchase.

How good/bad is your conveyancer?

I think how it will work is exchange now, complete when the house is ready (hopefully May/June) but they will give a long date like completion by 15th July and if it isn't ready then we can all pull out without penalty.

We had a good solicitor but this has taken so long he's retired and is replacement is a conveyancer and hasn't been so great.

 

[Glitter]

Do you think we should hang on? I'm totally torn between hanging on and hoping for the best and going for something quicker but less perfect.

We need to reapply for the mortgage. I guess before we actually exchange.

Once you exchange they are legally bound to complete so a lot less risky and this house does sound like a better house. I know the stress is horrible but May isn’t that far away.

Although is the other one the one with the massive garden you could extend into? And can you afford to extend if you did? Because that does change things a bit.

 

[Teaboy]

A list of requirements for a new home with things that are negotiable and things which are non-negotiable is what worked for us. It helped to sift through teh chaff to what was important.

As someone who works in construction I'd be very wary about completion and hand-over dates of new build properties. You should be aware that there is an evens chance that new build house won't be ready for when they say it will.

 

[Brainaddict]

How sympathetic is your current landlord to you being flexible? The stress could come from your current landlord saying you have to sign for another 6mths or a year or get out. Whereas if they're happy with a rolling contract it will be easier.

 

[Thora]

Once you exchange they are legally bound to complete so a lot less risky and this house does sound like a better house. I know the stress is horrible but May isn’t that far away.

Although is the other one the one with the massive garden you could extend into? And can you afford to extend if you did? Because that does change things a bit.

The one with the massive garden was another one and there were issues with extending that one (I have seen so many blooding houses now).

Although we're legally bound to complete, we have a lot more to lose (our deposit) than the vendor, right? We can sue her for our solicitor and survey costs but that's about it.

 

[Thora]

How sympathetic is your current landlord to you being flexible? The stress could come from your current landlord saying you have to sign for another 6mths or a year or get out. Whereas if they're happy with a rolling contract it will be easier.

No issues with the landlord, we've been here 5 years and just need to give a month's notice.

 

[Edie]

Christ, no advice cos others know better than me, but I can feel the stress from here Good luck with it all, once it’s done the trauma will fade if you swear to god they will only take you out of that house in a fucking box. Well that’s my experience anyway.

 

[Brainaddict]

No issues with the landlord, we've been here 5 years and just need to give a month's notice.

If you're happy in your current house and you have flexibility to leave when you want then I'd be inclined to hold out for the better house. Agree with Teaboy though that you can't assume it will actually be May. It will only be reasonably stress-free if you can accept that it just happens when it happens.

Six months might seem a while to wait until you get into a house but given how long house purchases take anyway you're not guaranteed to be quicker with another house, even a chain-free one.

 

[Thora]

I don't necessarily mind waiting 6 months, but my fear is that if for some reason it doesn't happen, in 6 months we won't be able to afford a 3 bed house which is the absolute bottom line what we need.
There are currently 3 bed terraces being advertised for £300k+ where we are

 

[quimcunx]

How long are you going to live in the house you buy versus hassle and delay now?

 

[MickiQ]

I wouldn't settle for somewhere you don't really want, you might feel rent money is essentially just going down the drain but if you spend a fortune on a house where you don't feel you will be happy then you might end up spending another fortune on moving again.
What about getting firm with the vendor of the house you want and demanding a firmer date? Why can't she rent somewhere if her house isn't ready.
My son and his young lady have just bought a house tail end of last year, the tenants living in the house he bought were buying a new build and it kept getting delayed (housebuilder blamed lack of workers due to Brexit) so I wouldn't be surprised if the one your vendor is buying gets delayed.

 

[prunus]

Do you think we should hang on? I'm totally torn between hanging on and hoping for the best and going for something quicker but less perfect.

We need to reapply for the mortgage. I guess before we actually exchange.

Everyone is different of course, and you have to make your own decision, but if it was me I would hang on, and not go for the one that's less perfect. The process is always like this, I mean always, it's ridiculous. One has to stretch one's normal tolerance of doubt and uncertainty, which has a tendancy to ring panic buttons in one's mind, which would be correct "walk away this is too difficult" instincts in almost every other aspect of life.

Get on to the mortgage re-application ASAP - hopefully will be quicker this time as they already have your details (but they are hamstrung to a certain extent by draconian regulations, so be prepared for a bit or even a lot of "surely this is unnecessary?").

On the exchange contract: completion can be conditional on whatever you can agree with the vendor. Eg - contract falls away if completion doesn't happen by X date (so you're not bound into eternity to wait for the new build completion); alternatively completion happens on X date regardless of the position with the onwards purchase - I would recommend one of these - maybe end September (or basically as soon as they'll agree to - I'd start off with end June as they've said that's when they expect to onwards complete, and negotiate).

 

[Athos]

If you're buying a house to live in rather than as an investment, it's not worth trying to time the market - the value of anything you buy will go up or down with the value of any place you'll want to move to thereafter. But, simply from the point of view of paying someone else's mortgage versus getting some equity of your own, it makes sense to get 'on the ladder' sooner rather than later - buy the place that best meets your wants within your budget, now. Especially since the current high inflation rate is likely to provoke a rise in interest rates; get in now, and fix a rate. The only thing against that is if you think anywhere you get now won't satisfy you in at least the medium term, such that you'll have wasted costs if moving. In that case, it might be worth waiting, but, given the way the housing market works, there's a risk of it moving further away from you.

 

[pbsmooth]

worth thinking about usable space rather than just the number too. may sound wanky but a badly laid out house or space where you don't want it can completely negate the extra space you apparently have. think what you really use and make sure your new place has that rather than fixating on sq metres.

 

[Elpenor]

worth thinking about usable space rather than just the number too. may sound wanky but a badly laid out house or space where you don't want it can completely negate the extra space you apparently have. think what you really use and make sure your new place has that rather than fixating on sq metres.

That makes a lot of sense - less sq feet in this house than my last one but far better laid out.

 

[bellaozzydog]

I would just get on the ladder, a house in the hand is better than two that are in ridiculous chains that could collapse

It doesn’t seem like the property market is going to crash anytime soon

I bought a place in June last year, I couldn’t afford to buy it now.

 

[Sweet FA]

Sorry if I've missed this Thora & writing in a rush but is there a big price difference between the houses? My house is a small 3 bed terrace in an ok area. Smaller than we wanted when we were looking and tbh I'd still really like a bigger garden. Otoh, it was a little bit less than the max we could have afforded so we had some money to buy new furniture/decorate etc. Plus in the time we've been here - 14 years - we both now earn a bit more so have some money for holidays etc. Basically we haven't had to worry massively about paying the mortgage as it was less than our max.

 

[Thora]

The bigger house we have agreed to £290k but I think she could probably get £310k for it if she put it back on the market now.
The smaller house is £280k. It would be a comfortable mortgage.

I do really like the smaller house so it's not like we'd be going with something terrible. The location is better, especially for me as I don't drive and am the one who does all the school runs and activities.
The garden is bigger.
The living space downstairs is better/bigger and I think we could fairly easily extend to the side for a utility/downstairs toilet.

I went for a second viewing today though and the agent told me it is no longer chain free The vendors were planning on going in to MoD accomodation but have now decided to buy somewhere "up north".

 

[pbsmooth]

location + garden size are two things that can't be improved - cheaper one sounds better! good luck.