Need to buy renter house and can’t get a big enough mortgage. Gutted

Whywontthiswork

Thanks all. Yes I’m afraid I also thought the estate agents were full of it to be honest. And I even said to my hubby let him put it on the market and see if he gets interest. 

Whatever happens I do intend to go back to him and say we can get to £333k (or whatever it is) and tell him that offer is ready to go. I doubt he will take it but it’s my last option. Agreed that if he gives us notice it could be difficult for him and he would have the home empty etc. Possibly for months. Even if we give him £333, I know he bought for £301k so making £32k already AND we’ve paid almost £70k in rent (don’t, that makes me sick to the stomach to write that down) over the last few years so I imagine he would be in a good position. 

With regards to mortgage length, we are happy for a long mortgage to start with but my husband is mid 40’s so it’s been tricky to get anything longer than 30 years. If we could borrow the £323k needed at 2.5% interest over a 30 year term we would be laughing! But the 3.69% interest rate over a 27 year term (which is the only option we seem to have now) is just way too much. 

TadleyBaggie

anselld said:

How do you know the asking price is reasonable?  Have you tried offering £15k below asking, bearing in mind the L would be saving estate agent fees and the possibility of a rental void whilst going to market.

According to their other thread, price has already been discounted and won't go lower:

https://forums.moneysavingexpert.com/discussion/6340957/trying-to-buy-rented-house-concessionary-purchase-help#latest

waribai

Also.......FWIW........are you with a good whole of market mortgage broker? We found that going to a decent broker made a huge difference. We actually found one on here worth her weight in gold.......

Whywontthiswork

waribai said:

Also.......FWIW........are you with a good whole of market mortgage broker? We found that going to a decent broker made a huge difference. We actually found one on here worth her weight in gold.......

I didn’t even know where to start. I’ve used a few local brokers that friends recommended as well as contacting two high street banks direct. Then I’ve contacted a few randoms online (who don’t seem to do much) but I don’t even know how to find a big mortgage broker? Happy to take recommendations although is it worth me contacting more if I’ve likely spoken to 7+ brokers already? 

Slithery

Have you tried posting on the Mortgages & Endowments board with your figures?
That's where most of the brokers hang out around here.

jaelato1

Whywontthiswork said:

Thanks all for your lovely comments, they made me feel a bit emotional. I should state that our lovely landlord has already knocked £20k off the price of the house as valued by 2 estate agents. Our estate has become very desirable and there are no houses for sale here so huge demand which is why I think the price has gone up so significantly. 2 other houses if they same size etc sold last year for £300 and 305 and they took a while to sell. He’s had ours valued at £365k and is offering it to us for £345k so a really good offer. We could pay £325-330 easily but anything over that is proving problematic. Our current rent is £1150pcm so we’re hoping to have a mortgage payment of £1250 maybe, but the nationwide offer would be £1500 and it’s just so much extra. I know we could move and buy a house elsewhere, but won’t get anything for cheaper than what has disounted the price to. Looked at help to buys in my local area too and they are no good as obscenely priced which means would STILL need a mortgage as the same amount we would need to buy this. Such a quandary we find ourselves in. 

There is no guarantee he will sell, but now he knows how much he can get I’m worried he will want to. My husband thinks we hold tight and see what prices are like next year and tell the LL that if things change then we can pay £325k at a moments notice if he changes his mind, but I hate the insecurity that comes with knowing he might turf us out (this happened to us in our last rented house and it frightened the life out of me and it’s embarrassing to be late thirties married with kids and always worried about being homeless). AND we’ve been trying to buy for so long now that I’m well aware that these prices keep rising and they likely will carry in rising pushing us further and further away. 

It’s a real frustration to me that the housing market works in such a way that disadvantages he. And I thought the 5a% deposit would make it easier but it really doesn’t. Need to borrow more which makes affordability harder AND interest rates are much higher. I’m so disappointed we haven’t found a broker who can find a lender to help, I thought it would be straightforward! 

I just needed to vent 

i think you should try accord mortgages, we were in similar position, most lender could lend us up to 370k but accord was ready to borrow us 400k. find a broker who deals with them.

saajan_12

Whywontthiswork said:

Even if we give him £333, I know he bought for £301k so making £32k already AND we’ve paid almost £70k in rent (don’t, that makes me sick to the stomach to write that down) over the last few years so I imagine he would be in a good position. 

With regards to mortgage length, we are happy for a long mortgage to start with but my husband is mid 40’s so it’s been tricky to get anything longer than 30 years. If we could borrow the £323k needed at 2.5% interest over a 30 year term we would be laughing! But the 3.69% interest rate over a 27 year term (which is the only option we seem to have now) is just way too much. 

Just to pick up on this, nothing inherently alarming about those numbers - the 70k paid for accommodation, repairs, etc at a time when you didn't have the capital to buy a house.. those things cost money. 

Assuming the LL owned for about 6 years and you were the first tenant, then they've made 70k rent + 32k appreciation is approx 33% gain over the 6 years. That's equivalent to ~5% per year compounded, which is less than a stocks tracker portfolio. Of course that doesn't account for any leverage, but there would also be significant costs and time involved, so overall not really a "laughing all the way to the bank" situation. Its a fairly normal return on the LL's money and time being tied up in providing you with accommodation. 

lookstraightahead

saajan_12 said:

Whywontthiswork said:

Even if we give him £333, I know he bought for £301k so making £32k already AND we’ve paid almost £70k in rent (don’t, that makes me sick to the stomach to write that down) over the last few years so I imagine he would be in a good position. 

With regards to mortgage length, we are happy for a long mortgage to start with but my husband is mid 40’s so it’s been tricky to get anything longer than 30 years. If we could borrow the £323k needed at 2.5% interest over a 30 year term we would be laughing! But the 3.69% interest rate over a 27 year term (which is the only option we seem to have now) is just way too much. 

Just to pick up on this, nothing inherently alarming about those numbers - the 70k paid for accommodation, repairs, etc at a time when you didn't have the capital to buy a house.. those things cost money. 

Assuming the LL owned for about 6 years and you were the first tenant, then they've made 70k rent + 32k appreciation is approx 33% gain over the 6 years. That's equivalent to ~5% per year compounded, which is less than a stocks tracker portfolio. Of course that doesn't account for any leverage, but there would also be significant costs and time involved, so overall not really a "laughing all the way to the bank" situation. Its a fairly normal return on the LL's money and time being tied up in providing you with accommodation. 

Good post.

Whywontthiswork

saajan_12 said:

Whywontthiswork said:

Even if we give him £333, I know he bought for £301k so making £32k already AND we’ve paid almost £70k in rent (don’t, that makes me sick to the stomach to write that down) over the last few years so I imagine he would be in a good position. 

With regards to mortgage length, we are happy for a long mortgage to start with but my husband is mid 40’s so it’s been tricky to get anything longer than 30 years. If we could borrow the £323k needed at 2.5% interest over a 30 year term we would be laughing! But the 3.69% interest rate over a 27 year term (which is the only option we seem to have now) is just way too much. 

Just to pick up on this, nothing inherently alarming about those numbers - the 70k paid for accommodation, repairs, etc at a time when you didn't have the capital to buy a house.. those things cost money. 

Assuming the LL owned for about 6 years and you were the first tenant, then they've made 70k rent + 32k appreciation is approx 33% gain over the 6 years. That's equivalent to ~5% per year compounded, which is less than a stocks tracker portfolio. Of course that doesn't account for any leverage, but there would also be significant costs and time involved, so overall not really a "laughing all the way to the bank" situation. Its a fairly normal return on the LL's money and time being tied up in providing you with accommodation. 

Totally understand. And I should also add here that my LL is exceptional and I cannot fault him nor blame him for this situation we find ourselves in. 

lookstraightahead

Op, there seems to be a lot of press about a slowing down of the market. If the landlord is savvy they might realise what a catch you are