Advice needed on a FTB purchase on the verge of falling through.

MajimaGoro

Hi everyone. My partner and I are FTB's and are really in need of some advice about our purchase. 

We started the purchase process for this house in April of 2021. The house was marketed at an asking price of £425,000. We felt the house was worth the asking price at the time given what we had seen and the garden size as well. However, when it the searches came back and our solicitor looked at the titles, it turned out there was about 1/3rd of the garden space did not actually belong to the seller. From gathering historical satellite images, we found that he had extended his garden boundary out about 6 years ago, and belt decking on the entire area, land which was not his. None of this had been declared to us at the start of the property purchase by the seller or the estate agent, as if we had known, I do not think the property would have been able to ask for the £425k price tag, and our offer probably would have maxed out around £410k. 

At the time we were still in a position to have benefitted from the stamp duty holiday, which would have been somewhere around £7k. With this issue cropping up, our solicitor advised that we look to get an adverse possession application filed from the seller’s side and see if they can get the land as part of the sale, rather than re-negotiate the price down which we felt the seller would unlikely do anyway. We waited months at this stage, and our mortgage offer also expired, so the original 1.25% rate or something along those lines was lost, and we moved to 1.6%, which still was not too bad. The land registry eventually responded, and that land had then been registered as leasehold by the land registry rather than freehold, and it turns out that this was due to some incompetence on the sellers’ solicitors’ part, as they had filed the application incorrectly, as there was notice periods to wait out, this was a long process, so it took us to around March 22. At this point, our solicitor advised that this is not ideal, and it would be best to get this sorted out before proceeding.

Once again, the seller’s solicitor files the application for freehold adverse possession, correctly this time. We had also been in touch with our MP to try aid the process to see if things could be worked a bit quicker, given how long the land registry had taken last time. We initially heard back that the council had filed a formal objection against the adverse possession application. So, the seller’s solicitor tried entering negotiations with the council to see if they could get a hold of the land. We had a response from our MP, regarding what the council responded to them. They essentially said they would be unwilling to sell that portion of the land to anyone, as it had specific uses, as it forms part of land which connects to a business park at the back of the property. A similar response had gone out to the seller, this was now about 3-4 weeks ago, and we had not heard from the seller or their solicitor. At this stage, we had to renew our mortgage offer again, and are on a rate of around 2.5%. Which has doubled to when we started, but still not in unmanageable territory.

This week (Aug 22) we received a response from the seller’s solicitor. They advised that the council would be unwilling to negotiate the sale of the land. Along with this, the seller is now saying that he wants to re-negotiate the price that we are paying for the property due to market changes over the last year and wants £475,000 as the asking price. We have felt slightly outraged and upset, given the property was misrepresented to us at the start of the process, by both the seller and their estate agent. We understand the market has changed, but equally, our mortgage is about to expire again, and we now would be moving to a rate probably around 4% or 4.5%+ if another rate increase hits next month. The market is also going to start undergoing a bit of a change with the new shift in interest rates, and additional rises on the horizon, as well as the country heading towards recession. We discussed and would possibly be willing to move to an offer of £440,000 at most. The house feels lost to us though, as I feel the seller has been shady from the start, and is now trying to squeeze us for more, when we were going to have to consider renegotiating anyway given the property lost a significant chunk of land from the garden.

Your guy’s advice on the general situation and possibly on how to handle the negotiation would be greatly appreciated, as right now I feel like dropping the purchase altogether due to the frustration, and time wasted. I remain here and ask for advice as this house certainly felt like “the one” for us, which is why we held on for so long, and I think the seller is clearly aware that we love the house.

Thank You All.

babyblade41

If I had been in your shoes then as soon as this came to light and the adverse possession wasn't completed correctly then I would have told the EA's that my offer is still on the table but will continue to view other properties.

The fact now that this land is not & never was inclusive in the price then I would have dropped my offer instantly as it did not include what you originally thought, & as for raising the price now I would tell them affordability is now a problem(whether it is or it isn't) due to the constant re-application of a mortgage & rise in interest rates.

As for where you go now I would tell them pretty much as at the beginning, offer is on the table if they so wish but will now be looking at other properties & offer will not be increased anymore. 

I bought a property 3.5 years ago where PA's registered the land incorrectly. The process of adverse possession was pretty straight forward but was time constrained but still only added another few weeks onto the time scale 


I'd leave this house emotionally & move on, if it all came back together at a price you are completely happy with then fine but the sellers don't sound very motivated at all 

HampshireH

I'd walk away. Your getting less than what you offered on and potentially offering more and paying out more on the mortgage too.

Annisele

I certainly wouldn't be increasing my offer.

Unless it was my absolute dream home, I'd walk away.

If I really loved the house, I might tell myself that if it was worth £410k (without the extra land) in April 2021, then it probably is worth £425k today. But I wouldn't be increasing my offer. Also, I think a property that might increase in land as a result of a claim for adverse possession (the old situation) is worth more than one where you know there's an objection to that claim (the current situation).

Given that the seller wants £475k, I doubt they'll accept £425k. But if you thought £425k was a fair price a year agon (with extra garden), then it's possible that you'll struggle to get a lender to value the property at £440k even if the seller does accept. So unless you've got a chunk of extra deposit floating around, you may not be able to afford this place anyway.

I'm sorry - housebuying in England/Wales sucks.

MajimaGoro

Thank you guys for the responses so far, and anyone else who wishes to offer their input. It has been helpful in contextualising and grounding the situation a little bit more. It has been a pretty awful experience, and still very disheartening. Though now there is more food for thought before we decide to proceed in any capacity.

mail2z

You are not the reason for any of these delays, they are due to seller occupying land (and trying to sell it) that does not belong to him in the first place. If you are not emotionally attached to the property, tell the seller to please take a hike.  You should have done that the first instance you noticed that the property sold is not what it actually is.  

You deserve a better seller and a better property.

hazyjo

You're more patient than me, and I'm the one usually paying no rush, it takes as long as it takes!

I would be hating them by this stage. Not nice sellers at all. I find it so rude increasing a price - let alone to buyers who have put up with incompetence, sneakiness and deception. Plus, who knows what might eventually get built behind!

DairyQueen

As a veteran property owner (40+ years and dozen+ house moves)  I can comfortably state that seller is taking the mickey big time.

I suggest that you emotionally let go of a property that you should have given up as soon as the solicitor screwed-up. The direction of travel on interest has been clear since last autumn and your priority should have been to complete a purchase asap to secure a decent mortgage rate.

Hindsight is a wonderful thing.

The seller deserves a sharp shock. Time for a counter-offer to their obscene £475k suggestion....something like this:

Given that you are facing a much higher mortgage rate, have missed the stamp duty window, have been deliberately misled over the property boundary, have been mucked about for over a year, and that the market has now moved against vendors....you are prepared to proceed on the basis of £400k, and only if vendor will reinstate the property boundary and exchange within 'x' weeks.

Any vendor this greedy and exploitative is likely to say 'no' but it may startle them into a reality check. At the least they may choke on their morning cuppa. Regardless, you will have the satisfaction of taking control and exiting the transaction on your terms.

You have been very unlucky so wishing you well in finding your first home.

Rumana03

I honestly don't know why you are bothering with this house. The seller sounds untrustworthy & I can't believe they have the audacity to ask for more money. You are better off looking at other properties. Demand has gone down because of interest rates so hopefully you can find something decent.

NameUnavailable

So has the seller removed the decking and whatever else should be done so that the garden is now only within his legal boundary?

I would reduce the original offer because it was based on property which isn't actually for sale, and the increased costs you are going to face. If they say no then walk.

There is always another property and as we head towards winter the cost of living increases are really going to start to bite (electricity and gas use will increase for all along with the much higher charges) added to increased interest rates and inflation generally, it seems highly likely that the property market will cool, maybe even decline who knows.

I wonder if the seller is expecting you to try to negotiate the price down so instead they've got in first with their demand for more money, thinking that if they then agree to proceed at the original price you will jump at it, feeling like you're saving £50K rather than paying the same price for less land...........

MajimaGoro

NameUnavailable said:

So has the seller removed the decking and whatever else should be done so that the garden is now only within his legal boundary?

I would reduce the original offer because it was based on property which isn't actually for sale, and the increased costs you are going to face. If they say no then walk.

There is always another property and as we head towards winter the cost of living increases are really going to start to bite (electricity and gas use will increase for all along with the much higher charges) added to increased interest rates and inflation generally, it seems highly likely that the property market will cool, maybe even decline who knows.

I wonder if the seller is expecting you to try to negotiate the price down so instead they've got in first with their demand for more money, thinking that if they then agree to proceed at the original price you will jump at it, feeling like you're saving £50K rather than paying the same price for less land...........

Yeah, that did cross our minds, but I think he is actually trying to squeeze us for more, than just trying to proceed at the original price. As for the garden, I do not think he has reinstated the property back to how it was with the original boundry yet.