Long protracted house purchase - Covid 19 makes an appearance at last hurdle

Mitzi79

Hello
I have read a lot of the Covid-19/house purchase threads but still feel as though I could benefit from some advice on my particular situation and  so would be really  grateful for your thoughts.

I made an offer on a three bedroom cotswold stone terrace back in Sept 2019. It was on at £285k. It's a "character cottage" 5min walk from a station with direct links to Oxford and London Paddington. I loved it and offered the asking price straight away.  

I was  not selling a property and the seller (a property developer) was chain free and I was hopeful to be in before Christmas

My solicitor then found out that the house had been advertised with rear access and a legal right of way around a side section of the row of terraces which it doesn't actually have (I can use the rear access on a practical basis it just doesn't have a legally acknowledged right of way around the last terrace house to get to the front).

This then lead to a lot of going back and forth between the solicitors as I wanted a legal easement. For various reasons that is not possible so if I want the house I have to accept it as it is.

The latest is that I need approval from my lenders to make sure they will still approve my mortgage without the rear access.

I feel as though I have been  very agreeable throughout this whole saga because I loved the house. Now, with C-19 I am getting seriously worried. I'm not the type to get worried about house prices per se, but this seems like a crazy time to be buying a house. At the same time, I do need a house and my feelings about the property ave not changed. I'm spending money on rent and the psychological benefits of having my own place would be huge. I work in emergency services so would expect my job to be secure.

Sorry for the long rambling email. Any insights much appreciated!!!

ACG

The current situation is very different to 2007, the government are literally doing everything possible to prevent that as are all major governments around the world. 

There is every possibility house prices will drop, but you need to weigh up how much you think they will drop and whether in the long run that drop will be more than rent. I am not convinced it will happen, the government are printing money to make sure banks can carry on lending, some of the specialist lenders are tightening their belts, some are carrying on as normal. 

If this is your long term home then house prices will recover, but appreciate that is not the same as buying at the bottom of the market. 

Mitzi79

Thank you I really appreciate your input. When my lenders are asked to consider the valuation given the rear access issue, will they then take in to consideration all the implications of Covid-19? Might they come back and say that will approve  a  mortgage at a lesser amount? Os it likely to be just a "yes or no" for everything we agreed in September 2019? I have only purchased one property before and it was a lot more straightforward!

elsien

The lender can't really consider all the implications of covid 19 because no one knows what they are yet. How much difference has the rear access made to the valuation? 

davidmcn

Mitzi79 said:

Thank you I really appreciate your input. When my lenders are asked to consider the valuation given the rear access issue, will they then take in to consideration all the implications of Covid-19? Might they come back and say that will approve  a  mortgage at a lesser amount? Os it likely to be just a "yes or no" for everything we agreed in September 2019? I have only purchased one property before and it was a lot more straightforward!

Sounds like your rear access issue is irrelevant to the valuation anyway.

There won't be any meaningful evidence of any effect of the pandemic on prices for ages, as it will take time for agreed prices to end up as completed and registered transactions. In the meantime surveyors are more likely just to add a "health warning" to their valuations that there may be an effect on prices in the near future. I haven't (yet) heard of any lenders reconsidering existing offers.

Mitzi79

elsien said:

The lender can't really consider all the implications of covid 19 because no one knows what they are yet. How much difference has the rear access made to the valuation? 

Thank you. Still waiting to find that out...nobody involved in the process seems to think it will make that much difference but we will see

Mitzi79

davidmcn said:

Mitzi79 said:

Thank you I really appreciate your input. When my lenders are asked to consider the valuation given the rear access issue, will they then take in to consideration all the implications of Covid-19? Might they come back and say that will approve  a  mortgage at a lesser amount? Os it likely to be just a "yes or no" for everything we agreed in September 2019? I have only purchased one property before and it was a lot more straightforward!

Sounds like your rear access issue is irrelevant to the valuation anyway.

There won't be any meaningful evidence of any effect of the pandemic on prices for ages, as it will take time for agreed prices to end up as completed and registered transactions. In the meantime surveyors are more likely just to add a "health warning" to their valuations that there may be an effect on prices in the near future. I haven't (yet) heard of any lenders reconsidering existing offers.

Thank you..that's helpful to know. I wasn't sure whether what the lender came back with could be the basis for a renegotiation. 

KiwiCoop

You are in a strong position to renegotiate.  The developer would have been rubbing his hands together when you offered full whack - now he'll have them pressed together in front of himself that you don't pull out.  He will do anything to avoid re-listing it now.  Go back with a reduced offer of £250k due to the title issues and current market uncertainty - he can only call your bluff but I reckon he won't.  I'm a developer.

Mitzi79

Thanks for your suggestion. I'm not a natural negotiator so under normal circumstances I probably wouldn't have the guts. However I'm financially reliant on myself and now I feel I owe it to myself to make the best decision. If the seller and agent hadn't misrepresented within the advert then I would have been in last year and I wouldn't have this hefty decision to make! I dont think they misrepresented deliberately but it does show a lack of due diligence. I was OK with letting it slide but now I think its time to stick up for myself a bit. I know the seller bought it for 270k in Sept 2018 but decided to sell it when a property became available on the same road which has more land and more development potential (so he hasn't actually done anything to the property I am in the process of buying).