First time buyer - what to do post-brexit

LeoH123

Hi there, just joined site as looking for some guidance on how we should handle our current situation.

So, we are first time buyers and have just had an offer accepted on a house in Bristol (about 2 weeks ago). We are currently applying for the mortgage with a broker and are confident that it will be granted over the next few weeks.

Couple of items of background.

1. I am a contract Project Manager working in FS. Because of this we have had to get a mortgage through a Contractor Mortgage specialist broker to get a mortgage agreed at a higher level. This cuts down the lenders available to us and we were left with the choice of Clydesdale or Halifax. Halifax are offering 2 year fixed at around 2.5% or 5 year fixed at 3.29%. Both are affordable to us if my job is safe (which I have been 100% reassured it is after Thursday's bombshell),

2. We are buying in Bristol, which has been incredibly competitive over the last few years. Many houses have been selling for up to 10-15% OVER the asking price and we had to pay this to secure the place we wanted (had been looking for 6 months and had many offers rejected due to people out-bidding us).

3. The seller has yet to buy a property himself. He and his partner are both selling their properties to finance a move to a bigger house so they can unite their families.

My current questions at the moment are:

- firstly - do we continue? I really feel we should given that my work situation hasn't changed and this is a perfect house for us that we can see ourselves in for many years.

- if we do continue then, should we try and negotiate the price down? I have a natural inclination that this is a pretty nasty thing to do given we've already agreed on a price (but not yet exchanged), but given the extenuating circumstances should we really still be paying about 12% over his original asking price? Given he has yet to buy himself and the market will probably slow a little the chances are he won't need to pay the extra. I know this is a tricky one to answer but any thoughts are welcomed - we don't really understand the etiquette etc here!

- should we go for the 2 or 5 year fixed price. my gut says go for the safe bet and pay a bit more for a longer fix, but is this the sensible thing to do? difference is a good £250 per month.

Thanks!

Caz3121

LeoH123 wrote: »

should we really still be paying about 12% over his original asking price?

I think how the offer compares to the mortgage valuation is more important.
It may be that if there is a theme of over 10%+ asking price, agents are artificially lowering the asking price to drum up interest and get into a bidding war (in Edinburgh we commonly have 'offers over' and sealed bids and can often go 30%+ over offers over price)
If the valuation comes back same as offer then you need to decide whether you are happy to progress, possibly your seller will try and go lower on what they buy so may accept lower from you...what is plan B if you do not buy? how long would you wait until you are confident it has settled?
Unfortunately there are no crystal balls so, whilst there are many knowledgable people, they cannot give a definitive..."house prices will reduce x% for the next y years" "best time to buy would be..."
We bought last year and are not planning on moving again so any negative equity is not really a concern...if we did not have the house we would be paying similar on rent...fixed for 3 years (probably not the best timing to be remortgaging)

LeoH123

thanks, really good point on the valuation. my expectation was that it was always going to be valued at less than our offer, but you may be right on the agents keeping it artificially low....

amnblog

Your post tells us that you want to buy, at the agreed price, with the five year fixed rate.

Do what you feel comfortable doing is rarely poor advice.

tlc678910

If prices fall a little in the next couple of years (not saying that they will) are you going to be "gutted" or are you going to be happily paying a mortgage that is not much more than rent and happy to remain in your home for a while.

Do what is right for you as the implications are too big to continue out of good manners. If you choose to reduce your offer, as you have said your seller has not found anywhere yet, they sound fully able to say no if thet prefer to hold on to the property and take a wait and see approach.

Tlc