Should I pull out of my purchase last minute? Covid concerns.

Splodges

Hi
Backstory:
I was due to buy my first property completing next week, I'm age 28 in the UK, I was buying a flat for £110k with a 10% deposit. I've been through an awful 11 month wait so far due to hold ups (previous owner knocked down a wall, lease extension couldn't be extended until surveyors had been out and new plans been updated etc.), the last 6 months I've been staying at my dads without ideal living/travel conditions but saving a lot of money. In about the last 14 months my net worth has gone from about £12k to £24k. 
My completion date was due 25/03. I've sent my solicitor my £11k deposit money but the contracts have not yet been exchanged (they will be due to first thing Monday if possible). I believe I can still pull out as the contracts have not been exchanged but would have to pay solicitor fees? (probably about £1k.) 

My concern is that the housing market is about to crash and if I stay at my dads, and wait another 12 months or so I could get more property for my money and save around another £10k towards a down-payment. This situation is far from ideal however I could put up with it to benefit more in the future. I'm aware nobody can time the markets, however I've just started investing in index funds the last 6 months and have watched my investments fall 30%. If the housing market follows this I'm worried about getting myself into negative equity. 

I do really like the flat and I'm aware it may have recovered by the end of my 5 year fixed mortgage when I may look to sell. But I'm just extremely worried about getting myself into a bad financial situation at this point in the time where the market looks extremely worrying. I am aware it's not the nicest move from me to pull out after the seller has been waiting 11 months to sell this property, however as circumstances have changed so quickly in the last few weeks I think I'm in my right to change my mind.

Any advice would be helpful, even if you're not sure what's correct just your personal opinions of what you think would be greatly appreciated.

Thanks in advance

Matt

N.B I also work in the pub trade as a manager- all pubs etc. in the England have been shut until further notice. I'm currently promised my full salary which is reassuring short term but I'm concerned about consumer spending staying low, unemployment rising, being made redundant and not being able to afford my mortgage and losing my home before I've even really got started in paying off the capital.

FtbDreaming

Are you sure its not just last minute cold feet? You must have been happy with the purchase to be going through the rigmarole for 11 months. You’re buying it to live in not as an investment. 

How would your dad feel about you moving in for another year or 2? Its ok when theres an end in sight but he may not be as happy if you've let your home go to stay with him for free. 

I know people say its just business but you have had so much opportunity to pull out over the last 11 months or even 3 weeks since the covid drama arrived at our shores pulling out on the day of exchange is quite mean. 

Splodges

FtbDreaming said:

Are you sure its not just last minute cold feet? You must have been happy with the purchase to be going through the rigmarole for 11 months. You’re buying it to live in not as an investment. 

How would your dad feel about you moving in for another year or 2? Its ok when theres an end in sight but he may not be as happy if you've let your home go to stay with him for free. 

I know people say its just business but you have had so much opportunity to pull out over the last 11 months or even 3 weeks since the covid drama arrived at our shores pulling out on the day of exchange is quite mean. 

Yeah, I was happy with the purchase at that price in how that market looked. And you're right that I'd be buying it as a home to live in for the next 5 years. I do consider it an investment too though, I'd like to grow my wealth, I planned on living frugally, overpaying, investing in the stock market to achieve financial independence before retirement age.

He might not be too keen on it overall, but he's in his 60s, has no savings, rents and only works in his friends clothes shop 2 days a week which is being sold. He might appreciate me paying half his rent and bills for a bit.

I have had a ton of opportunity you're right, but the stock market has only crashed the last few weeks so it changes things, even with that I intended on proceeding but now there's a lot more fear given all pubs are shut, everything looks bleak for the economy. Maybe I'd be better investing in the stock market say £30k spread over 2 years during the dip, then hoping my investments grow. 

I understand it feels quite mean. I'd actually feel mean doing it, even though I've never met the owner and I'm not contracted into the sale yet. I'm more concerned about making the right decision though.

I'm very conflicted and have 2 days to decide.

Davesnave

FtbDreaming said:

I know people say its just business but you have had so much opportunity to pull out over the last 11 months or even 3 weeks since the covid drama arrived at our shores pulling out on the day of exchange is quite mean. 

I wouldn't lay a guilt trip on someone because the perilous nature of their employment has just become apparent to them. In my book, that's quite mean too.

We're in an unprecedented situation, the nature of which is only just becoming clear to many . Only a week ago some respondents here were still doubting the severity and long term nature of the recession we shall face. No one has a crystal ball of course, but one's hardly needed.

I'm not going to advise the OP, as  they know best about their track record in the industry and their likely prospects when normality returns. What I will say is that we lost buyers at the start of the last recession and we were  mightily peed-off by that. We were  even more peed-off by the time we'd lost two more buyers and 16% of the original sale agreed price a year later! Regardless of how upsetting the experience was though, our losses were merely financial and we got over them.

secla

I would imagine anyone who is in the process of a sale at the moment if half expecting it to fall through

homeless9

Can you offer less, or is it too late?. UK has now shutdown. Hospitality sector switched off. Next to nobody travelling abroad, or travelling to UK. Cruise liners and airlines about to go bankrupt. Sport switched off for the rest of the year it seems. Utter devastation. 

Splodges

Davesnave said:

FtbDreaming said:

I know people say its just business but you have had so much opportunity to pull out over the last 11 months or even 3 weeks since the covid drama arrived at our shores pulling out on the day of exchange is quite mean. 

I wouldn't lay a guilt trip on someone because the perilous nature of their employment has just become apparent to them. In my book, that's quite mean too.

We're in an unprecedented situation, the nature of which is only just becoming clear to many . Only a week ago some respondents here were still doubting the severity and long term nature of the recession we shall face. No one has a crystal ball of course, but one's hardly needed.

I'm not going to advise the OP, as  they know best about their track record in the industry and their likely prospects when normality returns. What I will say is that we lost buyers at the start of the last recession and we were  mightily peed-off by that. We were  even more peed-off by the time we'd lost two more buyers and 16% of the original sale agreed price a year later! Regardless of how upsetting the experience was though, our losses were merely financial and we got over them.

Thank you for your comment, yeah I would feel bad for them certainly. I feel bad for many people what they are currently going through but I don't think it changes trying to make the correct decision. It sounds like you'd estimate a recession and fall in house prices over the next couple of years too then? 

Splodges

homeless9 said:

Can you offer less, or is it too late?. UK has now shutdown. Hospitality sector switched off. Next to nobody travelling abroad, or travelling to UK. Cruise liners and airlines about to go bankrupt. Sport switched off for the rest of the year it seems. Utter devastation. 

I think if I were to offer less it would seem like I'm taking advantage of the current situation for my own profit and I'd feel bad. If I were to suggest pulling out however, and they offered me a discount I might consider it as I'd feel like it would offer a small safety net for the risk. What do you think?

snowqueen555

graphs said:

Anything between 20-40% falls in property looking likely. 

I bloody wish!

Thrugelmir

Splodges said:

N.B I also work in the pub trade as a manager- all pubs etc. in the England have been shut until further notice. I'm currently promised my full salary which is reassuring short term but I'm concerned about consumer spending staying low, unemployment rising, being made redundant and not being able to afford my mortgage and losing my home before I've even really got started in paying off the capital.

Be prepared for a long drawn out battle. There'll be no quick fixes to the wider economy. 

JayRitchie

i think I'd play safe if I was you. How much do you earn? Is it a place you could live for 10 years?