House offer declined because we only have 5% deposit yet we offered highest bid

Buzzybee90

Paulaviki wrote: »

Depends on your circumstances doesn't it, if you live at home or rent, how much you earn, where in the country you live, what other living expenses you have to pay. It isn't easy for a lot of people, I think you'd find people who think it's easy are the exception not the rule.

Rent, south, all the usual, graduate wage. Just buckle up and scrimp and all is good!

jjlandlord

Part of the issue is that during the last century it was drilled into people's mind that everyone was supposed to be a homeowner.

Well sorry but that's just not the case.
It can be out of reach for those on he lower end of the income scale. In fact it can be out of reach for those not that low on he scale depending on the area.

The situation would become 'healthier' if society came back to its senses on this issue.

Edit:
Just had a quick look at the ONS stats, and for example in 1918 77% of the population was renting.

thequant

thegirlintheattic wrote: »

For many young professionals with rents so high at the moment it is a struggle to save a large deposit. For many people a mortgage will be much cheaper than rent.

Also people know that eventually house prices will rise (and have done in some areas), so that is added pressure on FTB to get on the ladder.

As a FTB in London I'm sure I would of had this problem had I decided to live in zone 1. But I decided to slum it (read sacrifice) in zone 5 and managed to save up a deposit no problem.


When young people say they can't rent and save for a deposit at the same time, what they really mean is they can't pay rent in an expensive area which will allow them to impress their friends while saving up for a deposit.


Seriously anyone who bleats that they can afford a mortgage, then should be able to get a deposit together. All they need to do is make a few sacrifices, live somewhere less fashionable, trade in that Iphone and cut down on those frothy Lattes or whatever they drink these days.

Lizling

thequant wrote: »

When young people say they can't rent and save for a deposit at the same time, what they really mean is they can't pay rent in an expensive area which will allow them to impress their friends while saving up for a deposit.

No, what they mean is they can't save as fast as house prices in their area are going up. In my borough, I've seen the price at the very bottom end of the market go up from about £150k for the cheapest 1-bed flats to above £200k in just a year. There is no way I could have saved an extra £50k in a year, particularly not by cutting back on lattes.

As crazy and wrong as it is, saving for a deposit no longer makes sense across much of London. Buying as much as you can while you're still able makes sense. This is why we have a bubble.

ging84

thequant wrote: »

As a FTB in London I'm sure I would of had this problem had I decided to live in zone 1. But I decided to slum it (read sacrifice) in zone 5 and managed to save up a deposit no problem.


When young people say they can't rent and save for a deposit at the same time, what they really mean is they can't pay rent in an expensive area which will allow them to impress their friends while saving up for a deposit.


Seriously anyone who bleats that they can afford a mortgage, then should be able to get a deposit together. All they need to do is make a few sacrifices, live somewhere less fashionable, trade in that Iphone and cut down on those frothy Lattes or whatever they drink these days.

you can afford to buy a property in zone 1
that means you have either had to be saving for a very long time or be earning well above the national average and well well above the national average for a young person
stop belittling everyone and assuming they earn as much money as you and just !!!! it all away in the apple store and starbucks

Alphamare

When we started saving we knew we needed 20% deposit. Those were the rules. You can imagine our complete surprise and relief this year to discover that 10% would be enough! Prices are rising like crazy and properties are coming on market already sstc! We sacrificed the potential increase in interest and house prices for a higher interest now. Because I extra amount of deposit saving is worth paying another £16000!!!! In rent for another two years. You think it's government housing benefit that people like us who pay taxes can own our own home!? We also to get to ten percent and because it's smart are borrowing way under what the banks would lend us. And yet what happened to the OP happened to us. I loved that house. So **** the seller that did this to you (and us) and **** you thequant!

That said if you can get to 10% relatively quickly it would be worth it for the drop in interest rates.

kingstreet

Back on topic. If the property could require essential repairs following the valuation, the buyer with only 5% deposit has no "wiggle room" to bridge any retention by increasing their deposit.

This would increase the chance of an aborted purchase, or request for the vendor to get repairs done, or cut the price.

Alphamare

How was my reply not on topic! Sheesh!

Besides who is to assume that someone with a bigger deposit has any spare money after their deposit and fees than someone else with a smaller one.

I know affordability can be an issue with 95% mortgages but what happened never should have happened to us. They didn't even know or ask about our borrowing ability which should have made us a better bet than the other guy who was borrowing his limit although with an undisclosed amount bigger deposit. He offered and got the property for less than the asking price which is what we offered.

Dan-Dan

Paulaviki wrote: »

The estate agents we've spoken to said we are in a very favourable position. In fact we put an offer on a place under the asking price but someone else bid the asking price and the estate agent's were very keen for us to match the offer because of our good position.

:D:D:D :rotfl:

TBagpuss

As others have said, it does mean you are a more risky proposition than someone with a larger deposit.

I am in the process of selling my house - my original buyer pulled out at the last minute as they failed the final credit check their lender carried out prior to exchange because they had borrowed further on credit cards. They also took a really long time at the outset to get their mortgage in offer in place. I'm sure those things don't happen with everyone with a 5% deposit but it's reasonable to assume that lenders are going to be much more stringent with their checks given that they are taking on a higher risk, and agents will know this.

It may be that the sellers of the particular house you offered on have been burned before, or have a reason for wanting a quick completion, and so are more cautious hat the average seller.

I have to say that after my experience I would be cautious about accepting an offer from another buyer with a 5% deposit and might well decide against it if I had another option.