Chain fallen apart - what would you do?

Sarah1Mitty2

nigem said:

The interest rates at the time we were renting from 1993 to 1994 were about 8% on mortgages, and 6% on savings if i remember correctly. Think it was volatile then as well

Not bad, we can`t be far off 8% mortgages again now? Savings rates at various times in the 1980`s were probably much higher though.

Sarah1Mitty2

julicorn said:

Hi all, 

Background info:

We've been selling our current flat (1 bed, Hove) and buying our new flat (3 bed, also Hove), and been in a long and complicated chain for a few months now. It's:

1) Our buyer's buyer (offer accepted in January)
2) Our buyer (offer accepted February)
3) Us
4) Our seller
5) Our seller's seller
6) Our seller's seller's seller (an old lady)
7) Probate bungalow seller

So 7 parties, 6 properties, and probate involved. The chain came together in June, probate got granted a few weeks ago. 

We pushed and pushed to get the sale completed by the end of September because of mortgage offers running out, but now the old lady has decided she doesn't want to buy the bungalow after all, so our chain is incomplete again. Everyone is flapping, our seller is panicking because she doesn't think she'll be able to afford a mortgage under the new rates, so instead of applying and locking in a new mortgage asap, she's currently trying to renegotiate her purchase price. Her sellers (number 5 in my summary above) are now also looking for a new home because they're fed up with dealing with the old lady (who also doesn't have a mobile phone, so chasing her has been very very difficult). 

The main dilemma:

We said all along that if the chain were to fall apart, we'd finish up our sale and move into rented for a few months, breaking the chain essentially. It's been a frustrating process so far, and having at least the purchase wrapped up seemed like the better option to us. Our flat is also realistically too small for us, and we want to move somewhere bigger, even if it involves renting for a bit. 
We restated this point when the chain fell apart, and also started a new mortgage application at 3.75% for our purchase - way less good than the 1.75% we had agreed beforehand, but ultimately affordable for us. 

I have to admit though, the rates going completely through the roof right now are giving me cold feet. I'm now just doubting every single choice, and am just all round worried about our immediate future. 

I suppose our scenarios are: 

a) Stay in our flat, not break the chain, but presumably loose our buyer.
Pros: We have only a small mortgage left (under £50k), so costs would be very low for us. 
Cons: We got a good offer from our buyer, and going through the whole process of re-listing, dealing with second and third and fourth viewings, dealing with enquiries and all that are something I'm honestly not sure we could face again atm. 

b) Move out, break the chain, rent for a while
This could either result in us still buying the flat that we're currently in the process of buying, or if our seller ends up freaking out completely over the increasing rates, then I suppose we could look for a new property, but be in a good position (chain-free, £300k in the bank from our sale). 

I'm just so worried right now about those interest rate rises - we've currently applied for a £275k mortgage, were previously approved for around £450k mortgage, and looking at 6-8% interest rates is just absolutely wild at that level! Are we going to be stuck in an expensive rental flat, unable to buy? But also, we're in our 30s and looking to start a family at some point, we can't really stay in our little 1 bed flat for years and years. And if the rates really go that high, then presumably it'd be harder to find a new buyer? And what could be the effect on house prices? 

I know that ultimately we're in a better position than most, and that it's all a bit of a first world problem, but It's just really stressing me out and it feels like every choice we could make is the wrong one. Any thoughts at all would be helpful at this point, I just want to make sure we've thought it all through properly. 

I think the best move is to stay in your flat and pay down the remaining mortgage debt that you have, to be debt/mortgage free will be very important as we re-adjust to more normal borrowing costs.

julicorn

powerspowers said:

What a nightmare Julicorn, I came looking for your diary to see how you were getting on 😞 
I agree with above that there’s no easy answer and whatever you do is a gamble. What is rental availability like near you? I remember looking at rented when I thought our purchase would fall through but there was so little on the market and it was a lot more than our mortgage payment!
hope the viewing goes well, keep us updated x

Thank you! We actually ended up going to two viewings, both eco-friendly, relatively recently built houses in the same area. We actually really liked them both, the first one (semi-detached) a tiny bit more than the second (detached). It's chain free as well, currently tenanted but the tenants are moving out late November (already have found a new house, through the same estate agent who is also selling this house now), which is a plus for sure. We're weighing up whether to put in an offer on Monday, currently leaning towards 'yes'. It's a very different option from the flat we were buying so we'll have to sleep on it for sure, but we did really like it. 

We'll sell and move out either way, have committed to that now. We might be in a position to exchange next week, and have requested 6 weeks between exchange and completion. 

powerspowers

Oooh exciting that you liked the other properties!! 

lookstraightahead

I love it when a plan comes together. 

All those people who won't move out under any circumstances are cutting off their noses.

good luck. 

doingitanyway

Good to read this. Great they are both chain-free.

julicorn

Thank you all again for the advice! We put in an offer on Monday, and we just found out it's been accepted We're really excited, it really is a fantastic property. I also really doubt we would have gotten it had we seen it back in February, the market really seems to have changed. 

jenni_fer

julicorn said:

Thank you all again for the advice! We put in an offer on Monday, and we just found out it's been accepted We're really excited, it really is a fantastic property. I also really doubt we would have gotten it had we seen it back in February, the market really seems to have changed. 

Congratulations!

RM_2013

julicorn said:

Thank you all again for the advice! We put in an offer on Monday, and we just found out it's been accepted We're really excited, it really is a fantastic property. I also really doubt we would have gotten it had we seen it back in February, the market really seems to have changed. 

Great news 

beanielou

Fantastic news