FTB after Brexit

wendel17

Hi,

We're first-time buyers in an in-demand area of the East Midlands who are buying a property for £220k that had an asking price of £200k.

After Brexit and the rumours of prices falling by 18%, 20%, etc, we're now worried about things like negative equity.

We love the house and feel it was listed with a low asking price to (successfully) attract a bidding war. It has features that other properties in the same price range don't have in the area.

We have a 5-year fixed-rate mortgage and will probably stay there for at least 5 years. Our deposit is 15.9%.

However, because our offer is well over the asking price, we are debating whether to reduce it – and if so, by how much.

Thanks in advance for any advice

jimbog

Your guess is as good as anyone's on here (really). Have a look at similar threads on here over the last few days and try you make some sense out of it all (if you can!)

kilby_007

4 properties I was previously watching (which sold in April/May) have come back to the market this afternoon. I don't think that's a coincidence and I get the feeling this is the tip of the iceberg. A lot of people are backing out/lowering their offers. This telegraph post: http://www.telegraph.co.uk/news/2016/06/27/britains-biggest-landlord-caught-in-brexit-turmoil---as-he-attem/ about a BTL 'vulture' is an interesting read....

"A number of firms have reported that residential property deals were falling through with one firm, The Partnership, claiming 50 per cent of deals were collapsing, a level it described as “unprecedented”."

smile88egc

At what stage are you in the buying process?

I'd guess the further you are down the line, the more traction you will have to lower your offer.

Any idea of the sellers circumstances regarding their need to sell? These will impact how strong your position is.

I have seen others lower their offers in the region of 10% this week, 15% is the greatest reduction I've seen so far.

Cakeguts

What makes you think that a popular area is going to be any less popular now?

satchef1

TBH I think this will turn out to be a good time to buy (at the right price). People are panicking before there's actually anything to panic about.

The way I'm looking at it, we're going to see a short-term tumble fed by panic. That will either turn in to a crash, or it'll level out. If it turns in to a crash, our overlords in Westminster will give us a second chance to 'vote the right way', knowing that a negative economic climate will swing us toward remaining in the EU. In turn, that would stabilise the economy. The government has little reason not to do this; the vast majority of MPs want to stay in Europe, and the public hate an economic downturn.

Just find someone who's genuinely scared of losing their money. Then negotiate hard. I've seen some great 'no chain' houses go on the market today for silly money. Off to view them tomorrow before offering a good chunk below the (already low) asking prices. I'll try and gauge who is the most eager to sell, and then work from there.

brit1234

Personally out of all the similar threads this one stands out as the original poster with the greatist risk. They are paying £20,000 over the asking price with a 15% deposit at the peak of the housing bubble in the area. The deposit is going to wiped out, this is a real negative equity risk.

Why not just pay asking price or haggle price down below that. If central London has been falling 9 months and looking at bigger falls then I can't see the midlands rising in price especially after Brexit.

If you need to buy then buy, but don't overpay. Personally I would like to what the government have planned to stablise the situation, at moment we have 3 months till we even get a new government line up and a plan for the future.

TBagpuss

brit1234 wrote: »

Personally out of all the similar threads this one stands out as the original poster with the greatist risk. They are paying £20,000 over the asking price with a 15% deposit at the peak of the housing bubble in the area. The deposit is going to wiped out, this is a real negative equity risk.

Why not just pay asking price or haggle price down below that. If central London has been falling 9 months and looking at bigger falls then I can't see the midlands rising in price especially after Brexit.

If you need to buy then buy, but don't overpay. Personally I would like to what the government have planned to stablise the situation, at moment we have 3 months till we even get a new government line up and a plan for the future.

I agree with this - except - you mention that you paid over the asking price but that the asking price was low. How your offer compare with the valuation of the property, and with sold prices for similar properties in the area?

Of course you can negotiate - and it will epend at that point whether the seller is as nervous as you are about Brexit, and how other potential buyers feel. After all, they only need t find one optimist!

wendel17

Thanks everyone for the advice/input, much appreciated.

Just to answer some questions, we are quite advanced in the purchase now – completion this time next month. The sellers need to sell in order to buy.

Our homebuyer's survey valuation was for 220k, so exactly what we offered and 20k over the asking price.

We are speaking to our mortgage advisor, solicitor and the EA today to talk through our options.

hazyjo

If it's in that high demand, no doubt there will be another buyer waiting in the wings. If I was selling and my buyer reduced their offer, mine would be straight back on the market and I'd tell them where to go.


Search the forum for 'Brexit' and read the other advice that's been given as there's lots of similar questions

Jx

cashbackproblems

I agree you are overpaying in a market which is falling! I think anyone who offered post stamp duty rise (ie April) will suffer hugely as the market quietened after April and Brexit will now knock the stuffing out of it over the next 2 years, do you really want to have overpaid by 60k+?I am also in a similar situation and looking for a 2 bed in the south east region (Kent commuter towns) which was in VERY high demand pre-April i.e I was offering 10k above asking and still getting out bid.

However this popular/in demand area has now flattened and im seeing falls every day, theres no logic that just because something is in demand it will continue to be at the same levels. People are fearing for their jobs, all this quantitative easy is going to cause rate rises in the future and general uncertainty should bring prices falling back to 2008 levels and lower.

My partner is an EA in this area and had 3 people drop out on Saturday, so don't be bullied by the EA/solicitors who will want to continue, you have not exchanged so can negotiate a drop of just pull out