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Case Study: FTB Buying in SE London
ManicRower
Posts: 49 Forumite
So the missus and I have just exchanged on our first ever home together. I thought that as the forum has been so helpful answering questions throughout the process for us, that we would detail our experience of buying in South East London.
We began looking seriously over the summer and did the various affordability calcs to see what our budget would buy us. Calcs offered us up to about £420k, but after doing some number crunching and looking at interest rates, etc, we decided that was far too high and went with a budget of about £350k. We currently live in South West London, and quickly realised our £350k budget probably wouldn’t get us a 2-bed in SW15 so we decided to explore other avenues. Having previously lived in Hither Green, we decided to look in SE London to get a bit more for our money in Greenwich, Blackheath etc.
We registered with all the local estate agents and eagerly awaited to be flooded with phone calls, e-mails and texts…..nothing.We quickly learned that there were approximately 1985093288435 competing buyers all in a similar situation to ours (FTB, no chain) or better (cash buyers). I therefore made it my personal mission to ring each EA every 2 days to check for new instructions, in addition to checking RightMove every day to check for newly added properties. Slowly but surely EA’s started contacting me with their new instructions. The only way I can describe it is it felt like we had proved our credibility and they were now willing to deal with us, like we were now worth their time.
Over the next few weeks we saw 7 flats and provided feedback on each one. We put an offer in on (I think) the 5th flat we saw. It was advertised for £335k and we put in an offer of £285k. It was rejected within 24hours and we were advised the vendor was seeking £320k.We would have gone to £300k but, to us at least, it wasn’t worth more than that so we ended our interest and carried on looking.
The 8th and final flat would turn out to be, THE flat. A leasehold (well, share of freehold) property, we spotted it on RightMove the day it was added (08/09/13) and arranged a viewing for the very next day. It was on at £350k in our perfect location, the compromise being it needed some work doing to it. We knew from our first viewing we loved it and arranged a second viewing there and then for the following Saturday (14/09/13). After our second viewing, we went for a coffee and agreed to put an offer in. We returned to the EA and submitted an offer of£335k. The EA advised he would put it to the vendor but that he had a 2-3viewings including a second viewing scheduled for a cash buyer, and he would advise the vendor to wait until these had concluded. To our surprise, we received a call the following day from the EA saying that he was gobsmacked,but the vendor has agreed to accept your offer and the property is now off the market. We then set about getting to exchange as quickly as possible.
We are buying with a 10% deposit so even though we have no debt, CCJ’s, defaults etc on our record, we were quite nervous about getting rejected. The mortgage is approximately 3.44 times our current combined income so, not an insignificant amount but, in our eyes, not overstretching. We wanted to go with First Direct but after doing someresearch, we weren’t sure we would have been accepted due to their stringent criteria. So instead we decided to get a broker and look at the options. Aftera bit of too-ing and fro-ing, we decided to go with a 5yr fix with Coventry BS. Payments are approximately 36% of our joint income which gives us plenty of disposable income and, with a bit of luck, our salaries should rise over the next 5yrs too. Our broker was pretty good and the process was dead straightforward, submitted our completed forms on 01/10/13 and by 10/10/13 our mortgage had been approved subject to valuation/survey. By 14/10/13 the valuation had been approved and we began looking at the survey and instructed our solicitor to submit the local authority searches.
On the survey, all came back ok, apart from the surveyor basically saying ‘I’m not an electrician/plumber/gas man so I’m not passing judgement on the electrics/plumbing/heating.’ Our vendor provided cert’s for the gas/central heating but nothing for the electrics. As we were making the biggest purchase of our lives, we decided to pay £96 and get anelectrician in to do a full report and we are bloody glad we did! Long story short the flat needed a full rewire. Whilst the searches were being conducted we got some electricians in for some estimates and our best quote thus far is £2300 for a full rewire of 2-bed flat + installation of 2 TV points and aerial on chimney. We’ve also been quoted £1400 for a full replaster of allwalls/ceilings. Feel free to pass judgement on those quotes
We then discussed whether or not to reduce our offer in light of the work needed. We decided against it, as we did not want to risk losing the flat in a highly competitive market over a few thousand pounds. We posed the question to ourselves, ‘would we have paid £340k for the flat?’ and undoubtedly we would have. We also thought that with Christmas on the horizon, we could use this ‘good nature’ as a negotiating tool over completion dates.
The searches were returned at the beginning of November and really, the only delay throughout the process was waiting for the management pack with the freehold accounts etc to come through. They came through on 13/11/13 and were all in order. Our buyer was keen to exchange/complete asap as he had already moved out, however we explained that due to the work required and having to give notice on our current tenancy, we would like to exchange now and complete on January 3rd. At this point we mentioned we hadn’t asked for any contribution to the work or price reduction and he was happy to accept our choice of dates. We exchanged today,meaning we went from offer to exchange in about 10 weeks, and now await completion J
So what have I/we learnt?
· Firstly, it IS possible for FTB’s in London to get on the ladder, but you have to differentiate yourself from all the others. Ring the estate agents constantly, be proactive, get on first name terms with them.
· Be genuine with offers. Our offer of £285k on our first property was ridiculously low, but going in at £335k on ‘the’ flat instead of £320k and inching upwards quite possibly saved us a bidding war. Could we have got it cheaper? Perhaps, but we are paying a price we are comfortable with and that’s what matters I guess.
· I cannot speak highly enough about our Estate Agents. They immediately took the property off of the market (within30mins their site was updated), they also declined a ‘viewing’ over the phone after I asked a friend of mine to ring up and attempt. They have kept us well informed at all times and although they did offer us the number of a broker, did not sell or pressure us into taking it. I am happy to provide the names/numbers via PM if anyone wishes.
· Conveyancing – DO NOT PAY LONDON PRICES! Our Solicitor is based in the North West is excellent and, compared to some of the fees charged by London Solicitors, a !!!!!!! steal.
Lastly, thanks to all the people that have responded to my previous posts. These boards have answered every single question I’ve had about the buying process and saved us a great deal of time,effort and probably money too.
Thank you J
We began looking seriously over the summer and did the various affordability calcs to see what our budget would buy us. Calcs offered us up to about £420k, but after doing some number crunching and looking at interest rates, etc, we decided that was far too high and went with a budget of about £350k. We currently live in South West London, and quickly realised our £350k budget probably wouldn’t get us a 2-bed in SW15 so we decided to explore other avenues. Having previously lived in Hither Green, we decided to look in SE London to get a bit more for our money in Greenwich, Blackheath etc.
We registered with all the local estate agents and eagerly awaited to be flooded with phone calls, e-mails and texts…..nothing.We quickly learned that there were approximately 1985093288435 competing buyers all in a similar situation to ours (FTB, no chain) or better (cash buyers). I therefore made it my personal mission to ring each EA every 2 days to check for new instructions, in addition to checking RightMove every day to check for newly added properties. Slowly but surely EA’s started contacting me with their new instructions. The only way I can describe it is it felt like we had proved our credibility and they were now willing to deal with us, like we were now worth their time.
Over the next few weeks we saw 7 flats and provided feedback on each one. We put an offer in on (I think) the 5th flat we saw. It was advertised for £335k and we put in an offer of £285k. It was rejected within 24hours and we were advised the vendor was seeking £320k.We would have gone to £300k but, to us at least, it wasn’t worth more than that so we ended our interest and carried on looking.
The 8th and final flat would turn out to be, THE flat. A leasehold (well, share of freehold) property, we spotted it on RightMove the day it was added (08/09/13) and arranged a viewing for the very next day. It was on at £350k in our perfect location, the compromise being it needed some work doing to it. We knew from our first viewing we loved it and arranged a second viewing there and then for the following Saturday (14/09/13). After our second viewing, we went for a coffee and agreed to put an offer in. We returned to the EA and submitted an offer of£335k. The EA advised he would put it to the vendor but that he had a 2-3viewings including a second viewing scheduled for a cash buyer, and he would advise the vendor to wait until these had concluded. To our surprise, we received a call the following day from the EA saying that he was gobsmacked,but the vendor has agreed to accept your offer and the property is now off the market. We then set about getting to exchange as quickly as possible.
We are buying with a 10% deposit so even though we have no debt, CCJ’s, defaults etc on our record, we were quite nervous about getting rejected. The mortgage is approximately 3.44 times our current combined income so, not an insignificant amount but, in our eyes, not overstretching. We wanted to go with First Direct but after doing someresearch, we weren’t sure we would have been accepted due to their stringent criteria. So instead we decided to get a broker and look at the options. Aftera bit of too-ing and fro-ing, we decided to go with a 5yr fix with Coventry BS. Payments are approximately 36% of our joint income which gives us plenty of disposable income and, with a bit of luck, our salaries should rise over the next 5yrs too. Our broker was pretty good and the process was dead straightforward, submitted our completed forms on 01/10/13 and by 10/10/13 our mortgage had been approved subject to valuation/survey. By 14/10/13 the valuation had been approved and we began looking at the survey and instructed our solicitor to submit the local authority searches.
On the survey, all came back ok, apart from the surveyor basically saying ‘I’m not an electrician/plumber/gas man so I’m not passing judgement on the electrics/plumbing/heating.’ Our vendor provided cert’s for the gas/central heating but nothing for the electrics. As we were making the biggest purchase of our lives, we decided to pay £96 and get anelectrician in to do a full report and we are bloody glad we did! Long story short the flat needed a full rewire. Whilst the searches were being conducted we got some electricians in for some estimates and our best quote thus far is £2300 for a full rewire of 2-bed flat + installation of 2 TV points and aerial on chimney. We’ve also been quoted £1400 for a full replaster of allwalls/ceilings. Feel free to pass judgement on those quotes
We then discussed whether or not to reduce our offer in light of the work needed. We decided against it, as we did not want to risk losing the flat in a highly competitive market over a few thousand pounds. We posed the question to ourselves, ‘would we have paid £340k for the flat?’ and undoubtedly we would have. We also thought that with Christmas on the horizon, we could use this ‘good nature’ as a negotiating tool over completion dates.
The searches were returned at the beginning of November and really, the only delay throughout the process was waiting for the management pack with the freehold accounts etc to come through. They came through on 13/11/13 and were all in order. Our buyer was keen to exchange/complete asap as he had already moved out, however we explained that due to the work required and having to give notice on our current tenancy, we would like to exchange now and complete on January 3rd. At this point we mentioned we hadn’t asked for any contribution to the work or price reduction and he was happy to accept our choice of dates. We exchanged today,meaning we went from offer to exchange in about 10 weeks, and now await completion J
So what have I/we learnt?
· Firstly, it IS possible for FTB’s in London to get on the ladder, but you have to differentiate yourself from all the others. Ring the estate agents constantly, be proactive, get on first name terms with them.
· Be genuine with offers. Our offer of £285k on our first property was ridiculously low, but going in at £335k on ‘the’ flat instead of £320k and inching upwards quite possibly saved us a bidding war. Could we have got it cheaper? Perhaps, but we are paying a price we are comfortable with and that’s what matters I guess.
· I cannot speak highly enough about our Estate Agents. They immediately took the property off of the market (within30mins their site was updated), they also declined a ‘viewing’ over the phone after I asked a friend of mine to ring up and attempt. They have kept us well informed at all times and although they did offer us the number of a broker, did not sell or pressure us into taking it. I am happy to provide the names/numbers via PM if anyone wishes.
· Conveyancing – DO NOT PAY LONDON PRICES! Our Solicitor is based in the North West is excellent and, compared to some of the fees charged by London Solicitors, a !!!!!!! steal.
Lastly, thanks to all the people that have responded to my previous posts. These boards have answered every single question I’ve had about the buying process and saved us a great deal of time,effort and probably money too.
Thank you J
0
Comments
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Thanks for this, it is just the encouraging story I needed to hear after losing out on 3 bidding wars in a row. We're looking in a lower price range (up to £250k) in SE London and the demand is insane - no chance of offering below asking price; the question is, how much over it to offer...
Will try to take your tip on board re: the agents but it doesn't do me any favours that I don't like making phone calls and that I have a difficult to spell and pronounce name (is it paranoid to think this might be putting agents off?) so really would prefer dealing by email.
(If you don't mind, who is your conveyancer?)0 -
OMG - are we all in competition with each other? I'm looking to buy in SE London too. The sort of house I would like has literally gone up nearly £100K in the current frenzy. That's a 30% increase ...0
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It's afflicting us all. Supply in SE London (we're looking in SE3/15/19/22) is way down on a few months ago. We saw a place in the Lewisham/ Blackheath borders a couple of weeks ago on the Saturday, and there were three offers on the table by the Monday. Madness.
Thanks to the OP for the case study.0 -
Congratulations! It sounds as though you got your DREAM flat and that's amazing. We started looking back in spring of properties around £350k mark, lost on 2. Was not overly bothered about the first one but absolutely gutted about the second loss (went to sealed bids). We are now looking at properties around £450k mark - was booked for a 2nd viewing on Sat, only to be advised by the EA that an offer had been put in that morning and if we wanted to compete, we would need to be offering over £485k. We have not put in our property onto market as we knew finding somewhere might take time which limits our budget but gives us a no chain proceedability - but that's not helping at all.0
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Tastysnacks - only 3 offers ! I saw a flat on the Forest Hill/Catford borders a couple of Saturdays ago, by Monday there were 7 offers (and mine made the 8th).0
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A tip I recommend, which worked well for me, is to create alerts on Zoopla, Rightmove etc. that search for a property in the areas you are interested in and set it so that it only shows the properties listed that day. You will then get an email as soon as a property comes to market. Then you can get on the phone straight away to the EA.
It is also worth looking on various EA websites because they don't list everything on Zoopla, RM, etc...
Phone is the only way in my view to get a chance at a property.0 -
bouicca21 - which property was it? I'm in the market in the very same area :beer:0
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We really are all competing against each other! Maybe we should club together and buy a mansion.0
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Thanks for this, very enlightening. I'm also looking in se london and have to admit don't call EAs all the time so perhaps I should start doing so every 2 days and etch my name on their books.0
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