buying house from our landlord

absyandtigger

Thanks for all the ideas, as you can imagine this is a very scary but exciting opptunity for us, especially with the housing market as it is!!
We are going to ask a chartered surveyor for his valuations and take it from there. Nothing ventured nothing gained, then we can make an offer to the landlord if we can raise the funds. I think getting a mortgage may not be too hard as we would not be requiring the whole value of the property on the open market. Paying it may be a different matter:o
I guess it just depends on how easy it would be to sell to someone else and whether their offer is better than ours.
Will let you all know how we get on
Once again thanks

clutton_2

how much of a deposit could you raise ? getting mortgages is no longer easy..

Incisor

clutton wrote: »

how much of a deposit could you raise ? getting mortgages is no longer easy..

As mlz1413 pointed out, they may have a fair amount of equity in the property. So without a cash deposit, provided there is a good discount for the fact of the tenancy, they will still come in at an excellent LTV. Also, presumably they have paid their rent on time since 1984. With a lifetime tenancy, you would be foolish not too.

A lender who only has computers that say No might not be able to recognise this as a good lending prospect. But almost anyone else should.

clutton_2

""they may have a fair amount of equity in the property.""

they have no equity whatsoever in the property - they are tenants

They will still need a deposit to get a mortgage regardless of how much the house is worth - and the lender will look at their income and decide if they can afford the mortgage repayments or not

absyandtigger

Mortgage already arranged, if we decide to go ahead, without deposit, due to the fact that the house is worth more than we will be borrowing so no danger of them losing their money!!
Repayments, can manage althougth, not if they insist on the 250k. But then we wouldn't bother at that price.

clutton_2

if the mortgage is already arranged then the lender has already accepted the valuation put on the property by their valuer - what does it say in the valuation report on the value of the property

absyandtigger

We have a provisional offer based on income, which won't reach the landlords asking price of 250k, hence the original post as to wheather the marriage value of 250k seemed reasonable.
I think the next step from what has been said on here is to get a chartered surveyour to put his value on it taking the tenancy into consideration.
Like I say we are really new to all this, and because it's quite an unusual situation it's difficult to know where to get advice.
You have all been really helpful with many suggestions.:T

Incisor

clutton wrote: »

""they may have a fair amount of equity in the property.""

they have no equity whatsoever in the property - they are tenants

When they buy it of course. And although they don't have title to anything at the moment, they do hold the difference in value between the house tenanted and vacant, in a sense similar to a ransom strip. It is this equity that they could convert to something they have title to if they buy the property - at that stage it would be as good as a deposit.

They will still need a deposit to get a mortgage regardless of how much the house is worth - and the lender will look at their income and decide if they can afford the mortgage repayments or not

They may not need a deposit!!! All the bank requires in normal times at least is an ability to repay and a good LTV. If the LTV is less than 100%, the rest is the equity held by the purchasers. And they have paid rent for years, so the are able to demonstrate that they are likely to pay a mortgage up to a certain level.

franklee

absyandtigger,

I do think the market value of the property with you in it as secure tenants should be quite low.

An investor buying would not get anything much in the way of capital gain for a pretty long time.

Meanwhile there is a liability of you being there, does the landlord have to pay for repairs?

Your secure tenancy could easily run for another 100+ years, say you live from age 40 to age 80 and you pass the tenancy on to a youngster (son, grandson whatever) at age 20 he could easily live to 90 odd. So that's 40 years for you and 70 years for him making 110 years!

So back of an envelope I'd say an investor would be buying for income. I'd say he'd want a minimum of 10% return. You pay 600pcm, that's 7200 per year. To get a 10% return a new landlord would be wanting to pay 72,000 for the house!!!

Then factor in an auction sale which is priced for a quick sale ...

So yes I'd get a professional valuation from a surveyor!!!!

planemad

There is NO way that the owner will get £179.000 at auction as the property is not really for an investor.
For an investor paying this amount for it and not having many rights over the property and it will take the investor over 25years to get his original investment back and he still has limited rights over the property.

Go in and offer silly money to start with like £120.000 and see if they bite.