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GLANSW
Posts: 12 Forumite
Hi, I wonder if anybody can help with some advice for an issue we are having with our property.
About 4 years ago, we purchased our first home in London - at the time we thought we'd done brilliantly well. We'd just about scraped a deposit and managed to get a 95% mortgage from the bank and a five year fixed term mortgage.
Since purchasing the property, we've gradually undertaken repairs when we can afford it - we've fixed the roof, upstairs bedrooms, etc. We knew the property had a bit of work that needed to be done to it, but we had 2 surveys done and the issues they turned up we felt were manageable.
About 18 months ago, my partner's parents became quite ill. She is Australian and after much soul searching we decided the best thing to do was to move to Australia - it had always been a long-term plan and it made sense to make the move, so we put the house on the market almost immediately.
Since then it has been nothing but disaster. We have had 3 buyers pull out - each time the bank has refused to give them a mortgage based on concerns raised by the survey. Two buyers were keen to continue despite the survey but could not find a bank willing to lend on the property. We have had 3 estate agents in this time as well.
Frustratingly, each survey has raised a completely different concern - none of the surveys appear to be consistent and only one of the issues was raised in our initial survey 4 years ago and was known to us.
During this period we have completed the move Down Under, which is making co-ordination quite difficult with the UK.
We have now dropped the price by £90,000 to the point where it is close to what we paid for the property and are still struggling to sell.
We now have a fourth potential buyer - this one cash - who is also threatening to pull out due to fresh concerns with their survey. Again, there is one issue known and yet another new issue that hasn't been highlighted on any survey. We have again offered to drop the price but they are insisting work is done before they purchase.
Unfortunately, we are at the end of our finances at this stage. Even with the most pessimistic budgeting we hadn't expected to still be trying to sell our house nearly 18 months on. We have maxed out every credit card trying to maintain the property and pay the mortgage and are currently living with my partners parents as we cannot afford to rent in Oz due to the house in the UK.
We have no money left to undertake any repairs and about 2 months maximum before we run out of money completely to be able to pay the mortgage.
Renting the house out is not an option at this stage as the rental value would not cover our mortgage and we would need to replace the boiler before we'd feel comfortable renting it out.
We're genuinely at a loss as to what to do. We are considering one of the quick sale house websites as this appears to be our only option. Repossession and bankruptcy are starting to become genuine fears.
It's easy to be wise after the event, but we honestly wish we'd never got onto the property ladder four years ago - at the time, we thought we were being smart to get on the property ladder while the mortgage and help to buy was available.
We've always been careful not to spend beyond our means, budgeted carefully, tried not to put too much into credit cards, and steadily repaired elements of the house where we could afford it. We'd planned to stay in the property for many more years but personal circumstances have dictated otherwise.
Even with the most gloomy forecasting, we didn't expect to be unable to sell our house 18 months later and with all cash reserves virtually exhausted. If we can dispose of the property, we can make a fresh start but it's proving impossible - the house is not in a bad condition and is very liveable! Everyone we know can't understand why the house won't sell.
Any advice is much appreciated - we genuinely don't know where to turn to before we completely run out of money!
About 4 years ago, we purchased our first home in London - at the time we thought we'd done brilliantly well. We'd just about scraped a deposit and managed to get a 95% mortgage from the bank and a five year fixed term mortgage.
Since purchasing the property, we've gradually undertaken repairs when we can afford it - we've fixed the roof, upstairs bedrooms, etc. We knew the property had a bit of work that needed to be done to it, but we had 2 surveys done and the issues they turned up we felt were manageable.
About 18 months ago, my partner's parents became quite ill. She is Australian and after much soul searching we decided the best thing to do was to move to Australia - it had always been a long-term plan and it made sense to make the move, so we put the house on the market almost immediately.
Since then it has been nothing but disaster. We have had 3 buyers pull out - each time the bank has refused to give them a mortgage based on concerns raised by the survey. Two buyers were keen to continue despite the survey but could not find a bank willing to lend on the property. We have had 3 estate agents in this time as well.
Frustratingly, each survey has raised a completely different concern - none of the surveys appear to be consistent and only one of the issues was raised in our initial survey 4 years ago and was known to us.
During this period we have completed the move Down Under, which is making co-ordination quite difficult with the UK.
We have now dropped the price by £90,000 to the point where it is close to what we paid for the property and are still struggling to sell.
We now have a fourth potential buyer - this one cash - who is also threatening to pull out due to fresh concerns with their survey. Again, there is one issue known and yet another new issue that hasn't been highlighted on any survey. We have again offered to drop the price but they are insisting work is done before they purchase.
Unfortunately, we are at the end of our finances at this stage. Even with the most pessimistic budgeting we hadn't expected to still be trying to sell our house nearly 18 months on. We have maxed out every credit card trying to maintain the property and pay the mortgage and are currently living with my partners parents as we cannot afford to rent in Oz due to the house in the UK.
We have no money left to undertake any repairs and about 2 months maximum before we run out of money completely to be able to pay the mortgage.
Renting the house out is not an option at this stage as the rental value would not cover our mortgage and we would need to replace the boiler before we'd feel comfortable renting it out.
We're genuinely at a loss as to what to do. We are considering one of the quick sale house websites as this appears to be our only option. Repossession and bankruptcy are starting to become genuine fears.
It's easy to be wise after the event, but we honestly wish we'd never got onto the property ladder four years ago - at the time, we thought we were being smart to get on the property ladder while the mortgage and help to buy was available.
We've always been careful not to spend beyond our means, budgeted carefully, tried not to put too much into credit cards, and steadily repaired elements of the house where we could afford it. We'd planned to stay in the property for many more years but personal circumstances have dictated otherwise.
Even with the most gloomy forecasting, we didn't expect to be unable to sell our house 18 months later and with all cash reserves virtually exhausted. If we can dispose of the property, we can make a fresh start but it's proving impossible - the house is not in a bad condition and is very liveable! Everyone we know can't understand why the house won't sell.
Any advice is much appreciated - we genuinely don't know where to turn to before we completely run out of money!
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Comments
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Auction?
What are the issues that have been identified?0 -
I hadn't actually considered auctions - although we don't have anybody in the UK with keys to the property - just our estate agent currently. That could be an option.
The various issues identified by the surveys are:
Potential repairs needed to the guttering (we are aware of this).
Potential repairs needed to the chimney stack
Damp (there is one small damp patch which we believe is related to the guttering). The rest of the house is damp free.
Boiler replacement (we are aware of this)
Structural issues with the loft conversion (this was done before we purchased the property - one survey described it as substandard).
Structural issues with the property build - the property is brick and timber and was built around 1920. It's the same build as every other house on the street
Bathroom and kitchen need some general repairs but these are more cosmetic and are not urgent.
We have already repaired:
The roof - tiles and brickwork (none of the builders who quoted identified issues with the chimney stack at the time)
Flooring
Carpets
Landing
We also installed a built in wardrobe when we repaired the landing - the bedrooms are an ok size but wardrobes made them much smaller so this was an efficient use of space and opened up the property for us!
EDIT: There is a lease on the property (it's a split level maisonette) that is 990 years, so is not a problem for any buyer.0 -
It has turned into an auction property. Take advice from the auction company about the reserve price and sell it for what you can get for it.0
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I guess trying to sell at a reduced price again would still prove difficult due to the time it's been on the market. It sounds like you've still got leeway to sell a lot cheaper and not owe the bank money after all the beans have been allocated though which is good.
Ps ignore someone who will inevitably respond shortly advising you to half the price as "sentiment has changed" or post an irrelevant vague link to the daily mail or a pseudo financial website!!!0 -
Of the survey issues you've mentioned, only one would prevent a mortgage being issued (the construction). A substandard loft-conversion would be a valuation issue if you were trying to classify it as a habitable room (though I don't think this has an actual definition per se).
It does sound like the auction is your only option of bringing a rapid sale."Real knowledge is to know the extent of one's ignorance" - Confucius0 -
I hadn't actually considered auctions - although we don't have anybody in the UK with keys to the property - just our estate agent currently. That could be an option.
Most EAs either auction properties themselves, or will have somebody they deal with who can. If not, find an auctioneer you like based on internet/phone communication, and introduce them to the EA to collect keys/paperwork from them.The various issues identified by the surveys are:
Potential repairs needed to the guttering (we are aware of this).
This is a quick, easy and cheap fix... Get it sorted!Potential repairs needed to the chimney stack
"Potential" or actual?Damp (there is one small damp patch which we believe is related to the guttering).
Very likely to be, yes.Boiler replacement (we are aware of this)
Not the end of the world. Either sort it before sale - it'll likely repay the investment - or simply flag it on the particulars. Does it actually work...?Structural issues with the loft conversion (this was done before we purchased the property - one survey described it as substandard).
That's going to be your showstopper. Still, your lender was happy, so...Structural issues with the property build - the property is brick and timber and was built around 1920. It's the same build as every other house on the street
Bathroom and kitchen need some general repairs but these are more cosmetic and are not urgent.
Irrelevant.We have already repaired:
The roof - tiles and brickwork (none of the builders who quoted identified issues with the chimney stack at the time)
Which suggests the chimney isn't really urgent.Flooring
Carpets
Landing
We also installed a built in wardrobe when we repaired the landing - the bedrooms are an ok size but wardrobes made them much smaller so this was an efficient use of space and opened up the property for us!
Cosmetic trivia.0 -
Thank you. I'm hoping we won't at least lose money on the property, but I'm not confident. At the very least we may be able to sell for what we paid for it.0
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Of the survey issues you've mentioned, only one would prevent a mortgage being issued (the construction). A substandard loft-conversion would be a valuation issue if you were trying to classify it as a habitable room (though I don't think this has an actual definition per se).
It does sound like the auction is your only option of bringing a rapid sale.
We thought that re: the loft but this was what the bank rejected the mortgage on. It's the only survey of four that this came up as an issue - no other survey has raised it as a problem.0 -
Most EAs either auction properties themselves, or will have somebody they deal with who can. If not, find an auctioneer you like based on internet/phone communication, and introduce them to the EA to collect keys/paperwork from them.
This is a quick, easy and cheap fix... Get it sorted!
"Potential" or actual?
Very likely to be, yes.
Not the end of the world. Either sort it before sale - it'll likely repay the investment - or simply flag it on the particulars. Does it actually work...?
That's going to be your showstopper. Still, your lender was happy, so...
Irrelevant.
Which suggests the chimney isn't really urgent.
Cosmetic trivia.
We should be able to get the guttering done depending on what needs doing but after that we're completely out of money. No wiggle room, no cash flow, so anything else is out of the question.
The chimney is bizarre. On the roofing work we did last year, three builders quoted and none of them suggested it was work that needed doing. Again, this most recent survey is the only one that's identified the chimney stack as an issue.
To be honest, I feel utterly defeated and would happily give the property away for nothing (or rather no or minimal loss to ourselves) - it's just become such a millstone round our necks.
I hadn't considered auction, so I think that may be the best route.0 -
I generally don't like to post something unconstructive especially when someone is in a bit of a dire situation, but 18 months is a very long time to have let the situation get so bad re: finances. Was there something stopping you after the first few months just paying for the new boiler and renting the property out? Understand you didn't want to get tied into a long term tenancy but short lets / holiday lets is something the EA could have managed (or still manage, for that matter - at least I'm now suggesting something constructive!).
Also another example of how 95% mortgages can be fraught with risks...
Auction is also a very strong option as has already been mentioned.
No, that's not an unconstructive question and is very valid!
When we first put the property on the market, we elected to do the roof first - it needed work and we were worried it was contributing to the damp in the house, so it made sense to prioritise this. Of course, it ends up costing a bit more than you've budgeted for but was definitely worth it. At the same time the front garden wall was a little unstable so we got the builder to repair this as well - probably not a priority, but when you've got somebody available who can quickly do this as an add on it made sense.
We then had a offer in relatively soon, who was unconcerned about the boiler and happy to proceed. They pulled out after a month.
We did have a friend "staying" in the house for a couple of months while they were between houses, which really helped us out, as they covered most of our mortgage during that period.
So at the start everything seemed to be smooth, with a few bumps.
After the first buyer pulled out it took ages to get any other offers, even with dropping the price, so we switched Estate Agents. We then had another buyer, but they pulled out after 2.5 months.
We've then been really struggling and have had to undertake little bits of essential maintenance. For a period we were paying rent in Oz and mortgage in UK, until we moved back in with family.
Essentially, cash flow starting getting very tight about 9 months in. We were a bit naive thinking it wouldn't take this long but we had another personal hit elsewhere, meaning we were struggling to repair. The guttering is the next priority before the boiler as that keeps coming up on surveys. That we can just about afford. Then we start getting very tight...0
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