Rent to buy...

80schild

Looking for opinions/advice...
We are pruchasing our idea home in a great area, decent size and tons of potential for a real bargain. In order to do this we agreed to sell to cash investors for 60,000. These investors are still messing us about 6 months later (the 6 month delay due to our vendor being very slow). We are ready to complete on our pruchase, but they won't commit to exchange. In panic we said you can have it for 52k on condition you exchange and complete this week-they said they would but have not instructed their solicitor or paid their deposit.
Our mortgage broker said she can get us another buyer for 51k but wanted us to know another option first 'rent to buy'.

We have 58,000 remaining on our mortgage (was going to pay in another 7000 to cover deficit it we sell for 51). The broker thinks we are mad letting it go for so little. It got valued at 90,000 by a bridge surveyor. However the problem is we just want rid of it. No one is buying round here as the area is going down hill fast and the crime is really high. The thought of letting it out and having that responsibility on top of the new home which needs work doing on it is too much IMO.

What do others think-clean break, even though we are losing lots of money (from inheritance off both parents n parents in law) or take the chances with buy to let?

80schild

well have just read through posts on here on problems with letting and decided its not an option for us. I just hate the thought that people think I am my husband are thick and ill informed for letting our house go for next to nothing and using family money to repay the huge negitive equity!
I don't agree though-the bank's valuation at 90k does not look at things like local crime stats, dog muck in the street, rotting rubbish in the alley, abusive neighbours and drug dealing-unless things change in the neighbourhood which is only going further and further downhill, no one is going to pay anywhere near MV for the house!

Moglet

Did I read in one of your other posts that it's still marketed at £90k to the general public and was only offered cheap to investors? Perhaps you could drop the price to say, £80k and offer a 5% vendor gifted deposit. I believe there are some lenders out there that will accept that as long as the purchaser is also putting in at least 5%.

Might get you £70k ish.

80schild

Yeh that's me! I allowed the house to be marketed at 90k plus-believing these investors were going to come up with the goods! They must of asked the estate agent to market it at the price they were aiming to get from the bridge surveyor!
If we had the time I would do something like vendor gifted deposit but the thing is we live in such a poor area-there are just no first time buyers and if there are they tend to go for new builds as there are lots of shared equity schemes. property developers are the only people that buy round here. It is an area for high rental demand and I think my mortgage brokers point is that if we change to a a buy to let mortgage on our own house we would only be doing the same as someone buying it would be so the money may as well be in our pocket. Its just the huge responsibility of it which scares me.

N79

What is the LHA rate for this property? That will give you an idea what sort of price LLs would pay.