First off, this is an absolute monster of a blog post so you might want to grab yourself a cup of tea and settle yourself in!
While
we going through it I scoured the internet to see if I could find
anything from someone who had experienced the same problems as us and
how they had solved them.
The internet was pretty sparse when it came to advice on the issues I
was struggling with. I understood how Hermione felt when she couldn't find any
reference to the Half Blood Prince in the Hogwarts library.
I’m
sure we are far from alone in our experience but I thought I would
share it with you all, in case there is anyone else out there who this will help.
This
post is going to be 100% honest about everything from money to how long
things took. When I was looking for info I desperately wanted ALL of
the details so I
have tried my best to include them.
Saving for our deposit
We started our house buying journey in July 2016 straight after we both graduated. I started my first job
that month and
Jared started at his in August.
We both had £1,000 each in savings each
from our final pay cheques with our part time jobs we had worked while
we were at university.
We were looking forward to our trip to Norway in February 2017, which we had paid for out of the holiday pay we had accrued
over the last year of part time work.
Neither of us had any personal debt or overdrafts as we had both worked part time throughout our degrees in order to avoid graduating with personal debt (student loans don’t count).
So
we both started work full time and moved back home to live with my
parents. We paid them rent of £200 per month each and we both saved £500
per month.
So each month
we added another £1,000 to our savings, which was a pretty good level
for us.
We were earning above minimum wage but well below the £21,000
threshold to repay our student loans. We both also paid around £65 into
our workplace pensions each month.
The
point I am trying to make is that neither of us had very much money to
live on as the vast majority of it was going on rent to my parents and
savings.
I was also
paying £40 per week for car parking, which meant I had less than £250 to
live on each month.
We took a small break from our saving in January 2017 to pay for our the trips we went on while we were in Norway
but other
than that we stuck to it religiously.
I got a better job in April 2017
and my pay rise went on repaying some money I owed to my sister.
I contacted our mortgage broker at London & Country
who told me that with my pay rise we could afford to borrow £180,000.
With a 10% deposit of £20,000 that gave us a budget of £200,000, which
isn’t very much for where we live but we were optimistic.
We had a long way of saving to go for our £20,000 deposit plus stamp duty and legal fees but were making steady progress.
Finding the house
We
first heard about the house in March 2017. My Nan mentioned to my that
my cousin was thinking of selling her house and that it would be perfect
for Jared and me.
We were initially dubious as we were still a long way off our saving
goal but decided to look into it anyway.
Under
this scheme, you buy a fixed proportion of the house (in our case 60%)
which is similar to shared ownership.
However, unlike shared ownership
you cannot ever
buy out the remaining part that you don’t own. This is to ensure that
the house does not leave the scheme and is available for future
residents.
With
normal shared ownership schemes you pay rent on the share you don’t
own. However with houses built under this scheme you don’t pay any rent.
You pay for the mortgage
on the 60% you own and service charges to the Housing Association that
is appointed to manage the property and that’s it. In our case our
service charge is currently £27.50 a month. This pays for our buildings
insurance and maintenance of the external shared
part of the housing estate.
The
house was on the market for £215,000, which meant that you were
purchasing 60% at £129,000 and would then need a mortgage of £116,100
with a 10% deposit of £12,900.
As 60% of the value of the house was only just over the threshold for
Stamp Duty at the time (£125,000) we would only pay about £80 in stamp
duty.
For
us this was perfect as it meant we could afford to do what we had
always wanted and buy a house in the village I had grown up in as we
only needed to borrow £116,100.
Living in Wiltshire, the average property price here is well above our
maximum £200,000 budget, even for a very small house.
I registered with Help to Buy South and asked my cousin to let me know when it was going on the market so that I could
register my interest in the property.
Being offered the house
As
I’m sure you can imagine this scheme is hugely popular and this house was
the first one in the development to ever be resold. It was also the
first resale of its
kind that the Housing Association had ever dealt with.
Not
to put too fine a point on it, but they were clueless about how to
handle this. I called up the housing association on the promised day to
register my interest
and was told that they had decided to delay advertising the house until
the following day. However the lady I spoke to let me
register my interest anyway as the house was already on their system and was ready to be advertised.
The
housing association have a month to find a buyer for the property, at
which point the owner (my cousin in this case) can advertise it on the
open market.
The following
weekend after the house was advertised, there was a local Help to Buy homeshow
and the house was featured in it. As a result more than FIFTY people
registered their interest in the house.
However, the key purpose of this scheme is to provide affordable housing for local people. As such the house has a Section 106 agreement that sets out the order of priority for people who
qualify for it.
First in line are people who live or work in our village and
those with family there. I was born in the village, have lived there all
my life and my entire family lives there. The house
even currently belonged to my cousin! We were hopeful that there was
unlikely to be someone who could beat my credentials.
I
waited an anxious week to find out if we had made the short list. At
which point I got a call from the housing association saying we had made
the top 5 and were
invited to view the house.
When I asked where I was in the list I was
told we were currently second on the list as there was someone from the
military who had registered an interest.
For those that don’t know Shared Ownership housing schemes give priority to military personnel.
Living where I do in
Wiltshire there are members of the military quite literally everywhere,
so the chances of us being offered any shared ownership house are slim
to none.
I was heart broken. The perfect house for us was about to be
offered to someone else, who didn’t technically
even qualify for it as they didn’t live in the village.
I
checked with my family and they told me the house was build on
allotments that were previously owned by the Church and that the Parish
Council had only agreed to
sell the land for development because the Rural Housing Trust offer this
scheme for affordable houses for local people.
My parents urged me to
find out more about it as they were convinced the Housing Association
were wrong, as this house did not fall under
the rules for normal shared ownership.
Whenever
I spoke to the Housing Association about it, I was flatly told it was
government policy that all Shared Ownership houses were offered to the
military no matter
what and my points about them breaking the planning agreement that the
house was built on fell on deaf ears.
I
decided I needed to look into it a bit more. I downloaded all of the
planning documents from Wiltshire Council and read them all in detail
but there was no Section
106 agreement within them.
I called the council instead and found out
the name of the person who deals with this and got them to send me the
Section 106 agreement, which clearly stated that this house was only to
be offered to local people.
I
even spoke to the person in charge of this at Wiltshire Council, who
assured me that I was correct and the Housing Association had it wrong.
I
sent everything onto the Housing Association and my cousin got her
solicitor (who handled the house when she originally purchased it) to
look into it for us.
Viewing the house
In
the meantime we were invited to view the house towards the end of April
2017. As it was owned by my cousin I was vaguely familiar with it but
Jared had never been
there.
We went over at 7pm as the person from the military had arranged
to view the house at 6pm.
When we arrived my cousin was furious that he
had never even showed up. We were looking round the house when he
knocked on the door and demanded to view the house
now. Even though he was now almost two hours late and we were already
there viewing it.
My cousin asked him to ring up and make another
appointment for a different time.
Viewing
the house was hard, because the more I looked at it, the more I knew it
was perfect for us. I was trying very hard not to fall in love with it.
Jared loved
it too and we both went home feeling rather deflated as the Housing
Association were adamant that the planning permission for the house
meant nothing compared to the government policy to offer the house to
military personnel.
To
top it all another couple came to view the house and one of them was
also born in the village with family there. Our chances of being offered
it seemed lower than
ever.
Being offered the house
The
man from the military never called back and made another appointment.
On Friday, a week later I received a call from the Housing Association
to say that they had
got their solicitors to look into the info that I and my cousins
solicitors had sent them and had concluded that we were correct and that
the person from the military had no claim on the house.
They
then told me they were a bit stumped on how to chose between us and the
other couple as we both equally qualified for the house.
Thankfully
they decided in the
end to go with who had registered their interest in the house first.
As I
had registered before the house was even advertised there was no way
they could offer it to anyone but us.
I walked around in a daze for the rest of the day. Jared and I went to Bath
at the weekend and had a fantastic celebratory
lunch at Turtle Bay and dreamt of what our new house would be like. It
was such a triumphant moment I could scarcely believe my insistence and
research had paid off.
Getting our Mortgage offer
The following
Monday I immediately called up several
local solicitors and asked for quotes.
We decided to go with Bonallock & Bishop as they are on the Housing Association’s panel so
offered us a discount.
They were also on the panel of all the major
lenders and had a solicitor who specialised in first time buyers and all
types of shared ownership houses.
I
let our mortgage broker know that we had been offered the house and
would like to proceed with our mortgage application. We did all of this
over the phone in about
40 minutes and then we had to wait for the house to be valued by the
lender.
I received a letter from the housing association on the 22nd May 2017 formally offering us the house and setting out the timetable.
We had to have our mortgage offer by 22nd June, ready to exchange contracts by 22nd July and we were to complete before 22nd
August.
If this deadline was
missed the house would have to be revalued, at which point the asking
price could change and we would possibly have to reapply for our
mortgage and effectively start over.
The
house was valued by the mortgage lender about ten days later and three days after that I got a
call to say our mortgage offer had been accepted!
I forwarded the copy
of the mortgage
to the Housing Association and they quickly approved it.
We
were so happy as this is the major hurdle for most people. I called the
solicitors and instructed our searches.
I sat and marvelled about how
swimmingly everything
was going and that if we continued to make good progress we should have
the keys in plenty of time to meet the deadline.
Dealing with the down valuation
That
was pretty much the point where the real nightmare began. If I thought I
had had to battle just to be offered the house I had no idea what was
in store!
A
few days after I had been offered the mortgage and it arrived through
the post I had a call from my mortgage broker to say there had been a
mistake and that we shouldn’t
have been offered the mortgage as the house had been down valued to
£202,000.
The lender had not taken into account that the whole
house was on the market at £215,000 and that we were only buying 60% of
it at £129,000. As £202,000 is
a bigger amount than £129,000 their systems had not recognised this as a
down valuation and had offered is the mortgage in error.
The
mortgage valuation is where the lender sends someone to value the house
to check its worth what you’re paying for it. This is in case you don’t
pay your mortgage
and the lender needs to sell the house, they need to make sure they can
get their money back.
If
it is the same value or higher than you have agreed to pay then you are
good to go. If their valuation is lower than what you have agreed then
you find yourself
in a tricky situation.
You have pretty much three options:
1. Walk away from the house and look for something else.
2. Decide you are comfortable with the fact the down valuation will effect your loan to value ratio and renegotiate with the lender.
3. Haggle with the seller and get them to drop the price.
None of these options were really available to me for the following reasons:
1. If I walked away I was very unlikely to find another house as part of this scheme
again. Plus it would cause the house my cousin was purchasing to fall through.
2. We had to have a 10% deposit as part of the contract for buying the house. We couldn’t
go down this route.
3. In
our case the seller (my cousin) doesn’t get to set the price. The
Housing Association
get someone to value it, you don’t get to haggle at the outset like you
would normally. Plus if I made my cousin lower her price she wouldn’t
have enough money to buy her new house, so she couldn’t drop the price.
I
spoke to my mortgage broker who told me he has seen this happen many
times and what normally happens is the seller either agrees to lower the
price or the buyer
walks away.
Often the seller will agree to lower the price as it likely
any future buyer will have the same problem.
In fact I recently read
this article about down valuations becoming increasingly common so we
are definitely not the only people to have experienced this.
However, I shouldn’t think many people have experienced a down valuation with the added complexity of rural shared ownership!
Our
broker said the only thing we could do was to get the housing
association to appeal the lenders decision.
They agreed to do this and
chose three nearby houses
that had sold for comparable amounts. Personally I thought the houses
they had picked were a bit dubious but I sent off the appeal anyway.
My
broker told me to accept that we were probably at the end of the road as
he had only ever seen a handful of successful
appeals during his entire career.
Getting our mortgage reissued
We
had to wait ages for anything to happen with the appeal.
As it turned
out Halifax (our lender) had subcontracted out the valuation several
times and it had to go
through a chain of four people every time anything needed to happen.
My
broker had to pull a few strings but eventually we got a response and
against all the odds the appeal was successful!
The
valuation was now £215,000 for the whole house again and we were back
on track. Our mortgage offer was finally reissued and approved by the
housing association
again.
This whole process took the best part of a month and was incredibly frustrating as the deadline was creeping ever closer.
The Solicitor saga begins…
While
all of this had been going on things were relatively quiet on the
solicitor front.
We had already instructed our searches and were waiting
for the local authority
one to come back. Our solicitor had held off raising enquiries with the
sellers solicitor while we waited for the outcome of the appeal, so
these were now raised.
We
paid our deposit monies to the solicitor and wept a little at the vast
amount of money being handed over.
The only good thing about the endless
delays was it meant
Jared and I had time to save the rest of the cash we needed as we were
buying this house well ahead of our original schedule.
At
this point my solicitor pointed out that nowhere in the mortgage offer
did Halifax confirm that they were happy with the fact we were only
buying 60% of the house.
She wrote to them and waited for a response.
And
so began a long and drawn out battle between our solicitors and
Halifax’s legal team.
Every time our solicitor wrote to them they wrote
back telling her to check
the guidance notes.
She would respond to say she had read them cover to
cover and there was nothing in there that touched on a house like this
one and could they please write back to confirm they were happy with
this.
They would respond by telling her to check
the guidance notes.
It
was absolutely maddening.
Nothing we did seemed to be able to get
through to them.
Our solicitor spend huge amounts of time on the phone
trying to explain to people
what she needed from Halifax, only to be told that she couldn’t speak to
the legal team directly and that they would get the legal team to write
to her.
Our broker stepped in and got some of his senior contacts at
Halifax to push it to the top of the legal
teams queue.
Eventually our solicitor received a letter stating that
they were unable to respond to her points in her original letter.
At
this point I rang Halifax myself and went ballistic and I continued to
ring them every day until this was sorted.
I eventually got the name of a
manager who personally
sorted this out for us and a week later we received a letter from
Halifax’s legal department answering each of my solicitors questions in
detail.
Why they couldn’t have done that in the first place I’ll never
know.
Our final mortgage offer was reissued once
again to acknowledge the points requested by our solicitor.
By
this time we were past the deadline that the Housing Association had
set.
However in the contract for the house it states the valuation
carried out to set the asking
price remains valid for 6 months.
As this was carried out in April this
meant the valuation lasted until October, which thankfully gave us some breathing
space.
Good thing our solicitor was on the ball and raised this or we
would have been back to square one.
Getting a new mortgage deed
Halifax’s
letter told our solicitor that we would need to sign a new mortgage
deed and that the Housing Association would also have to sign it.
Our
solicitor enquired
as to how she could go about getting her hands on this mortgage deed,
only to be told that nobody at Halifax could find it or had indeed ever
seen it.
This deed seemed to be the stuff of legend as they were
confident it existed but nobody who worked there had
ever come across it.
After
a great deal of time wasting it was eventually located and sent to the
Housing Association to approve.
The Housing Associations solicitors then
said they wouldn’t
sign it and sent back a list of changes they wanted Halifax to make to
it. Halifax’s solicitors of course refused to accept any of the changes.
Our solicitor then sent the Housing Association a terse but effective
email pointing out that they were being pedantic
and that it is their role to help us, not obstruct us as this was now
the only thing preventing us from exchanging contracts.
The following day they replied to say they would now sign it.
Jared
and I drove into our solicitors office to sign it so that it could
immediately be sent off to the Housing Association.
It was posted on
Thursday afternoon and
arrived with the Housing Association on Monday morning.
At
this point we were told the Housing Association could only sign
documents on Mondays, Wednesdays and Fridays, which has to be one of the
most ridiculous things
I’ve ever heard.
They
couldn’t sign it on Monday as it hadn’t yet been processed so we would
have to wait until Wednesday. I could barely sit still at work all week I
was so frustrated.
Finally on Wednesday at 4pm I got a call to say that it wouldn’t be
signed today as all the directors had gone home for the afternoon. I
would now have to wait til Friday.
I was so upset I actually burst into
tears and had to go and have a little cry in the
toilets at work.
So
it was finally Friday, which was the provisional date for signing
contracts and also our solicitor's last day at her company.
The Housing
Association didn’t seal
the deed until almost 5 o’clock at which point everything was put on
hold over the weekend.
Another anxious, restless weekend followed and
Monday eventually rolled round.
Exchanging contracts and completion
After
many months of struggles I’m sure you can understand that I was
expecting yet more problems, but actually this was the quickest and
easiest part of the process.
On
Monday morning I had a call from my solicitor's paralegal asking what day we would like to complete so that she
could exchange contracts.
My answer was pretty much as soon as possible!
Everyone’s solicitors
conferred and I had a phone call an hour later to say that completion
was set for the following Tuesday on the 19th September and that we had now exchanged
contracts.
After
so much hard work to get to this point I couldn’t help but feel a
little deflated afterwards.
I rang Jared and told him but by the time I
got home from work
and told my family I was just so relieved I could hardly contain myself.
The
following week at work just crawled by but I spent the time trying to
organise things like our internet and insurance and changing as many
addresses as I could.
Finally
the big day rolled around and I had a call at about 10am to say that
completion had taken place and the house was now ours. We were now officially homeowners!
In conclusion
The
enormity of it still hasn’t really sank it now to be honest and
sometimes I think back to how frazzled and stressed I was and I’m just
so grateful that it came
together in the end.
Now we have finally moved in life is starting to get back to normal. But I can totally see why people say buying a house
is incredibly stressful!
If
you are going through the process I hope reading our story has helped
you see that things rarely go smoothly when you’re buying or selling a
house.
We faced many problems and setbacks and we found a way to overcome them all in the end so hopefully you will too.
I couldn’t recommend London and Country
highly enough if you are looking for a mortgage broker. Our broker Adam
Walker
went above and beyond for us so many times and I’m convinced his hard
work ultimately made the difference.
Our solicitor Sarah Sams was also
amazing and she worked tirelessly to make sure this all came together.
Although she has moved onto pastures new we were
very pleased with the service we received from Bonallack & Bishop.
Most
of all we could never have done it without the endless support of our
families and friends who picked us up after every set back and reminded
us to keep going.
So a huge thank you to them.
For
anyone out there buying a house like ours, please feel free to get in
touch and I will try to help you if you are coming across similar
problems to us.
I only
know one other person who has bought a house like ours as a resale and
they encountered many of the same issues, particularly when it came to
dealing with Halifax.
They successfully made it through and their advice
helped me enormously towards the end.
If
you are currently buying a house or thinking about buying one in the
future, good luck! I promise it was worth all of the stress in the end.
First time buyer blog post series:
1. We bought our first house
