Trying to buy and competing against cash buyers is giving me a headache!

[barryp1]

Originally Posted by FamilyGWales

OP - I hope you are able to get something that suits you soon. I can imagine it must be very frustrating.

I hadn't read the 8-22% reduction figure previously. That seems quite a drop, barring the stanp duty changes am wondering whether it might be better for my DS to consider putting off buying til then anyway if it is more of a buyer's market at that stage. He is a first time buyer too.

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It depends on area and price. It is still possible that some properties will rise in price when the national percentage is down.

[123]

Originally Posted by Pino_Spetzberg

I realise BofM&D is a cliche but it's often the cash buyer that has been gifted by parents, more so than mortgage applicants at the moment is my guess.
Parents lending rather than giving ? I'm not sure that's typical ?

With savings rates so low, almost negative, I know a good number of grandparents, and parents, that have used their money to help, being very happy to do so.

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I can see when buying a £150k house and lookign to raise a further £7.5k (to get from 5% to 10% deposit for example) that many parents or GPs might choose to hand over £7.5k.

I doubt cash buyers though are using gifted money, or at least not all gifted money.

It's one thing to give your child £7k to get a better rate, it's slightly different to give them £150k to buy a house outright.

However if the whole amount is an outright parental gift (or even a loan that the parent expects back), the fact that a bank isn't involved makes it irrelevant to the transaction, it just becomes an obligation for the buyer to repay their parents at some point.

[tspill]

I have been buying and selling houses for many years - a couple of our own homes but mainly cheaper rentals. I will take a cash buyer every time - even with lower offers. Buyers needing mortgages are so much more difficult - especially as you get closer to the completion date. For me, they simply aren't worth the hassle. Cash buyers often know what they are doing and often dont even survey.
When we moved house last year, the buyers did need a mortgage and the completion ended up being delayed more than a month.
So in house buying - cash is king. But I do appreciate that this can make the process difficult for some buyers. There isnt really and answer as this is driven by marker forces.

[Pino_Spetzberg]

Originally Posted by 123

I doubt cash buyers though are using gifted money, or at least not all gifted money.

It's one thing to give your child £7k to get a better rate, it's slightly different to give them £150k to buy a house outright.

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It happens.
Not every parent is seeking to be paid back regardless of amount.
People have different outlooks and varying financial circumstances.


Anyway, probably not a particulary interesting point from me tbh.

[ROBBOTOO]

We were in the fortunate position of being able to gift our son and DiL their deposit. But had to sign a legal document that it was a gift and had to send proof we had the money in the bank to cover it. So checks are even done on those gifting.

[magickate]

I feel your pain OP. We had to make the very difficult decision to not put on offer in on a house we really wanted due to us not being cash buyers. It's so hard!
We're not 1st time buyers though.

[sully301]

They've probably been advised to accept that offer. Mortgage companies are really jumpy at the moment and are taking a long time to approve mortgages and scrutinising every little detail. It took my friend 2 months longer to sell because of this.

[LostPrincess]

It's such a tough time for first time buyers. We were so fortunate to be able to buy our flat in 2019, and it was in such a dire state that it had been on the market for months and it seemed nobody else wanted it. We had various mortgage issues (we are students) so there were a lot of stops and starts but we were just lucky that no other cash buyer came forward in the meantime.

It's all down to luck, I hope that some luck comes your way soon!

[JudyC]

Originally Posted by 123

The problem 1st time buyers have (or in fact anyone trying to get to the next "equity threshold") is that any money coing from family that is (or the mortgage company suspects is) a loan then it doesn't count for qualification purposes.

They don't want to lend you 90% for a house only to find out that your ability to repay is heavily hampered because you also owe your parents 5% because you only had 5% yourself. The banks know most people will appeal to them for repayment holidays or reductions rather than welch on paying back the rellies...

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We know we will need to write letters saying the money is a gift, which it is.
It came from four members of the family, so we will all do the same.
It made up their deposit from 10% to 15%, but then they were told they need 20% so are saving as much as they can again and hoping the mortgage situation improves in the coming months.

[123]

Originally Posted by JudyC

We know we will need to write letters saying the money is a gift, which it is.
It came from four members of the family, so we will all do the same.
It made up their deposit from 10% to 15%, but then they were told they need 20% so are saving as much as they can again and hoping the mortgage situation improves in the coming months.

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I was told by a broker that the best way to prove a gifted deposit is indeed a gift and not a loan is to have it in the buyers account for 6-12 months before application (as most mortgage companies only ask for at most 12 month statements and many only 3 months).

The worst thing you could do is if the buyers decide not to but right now and wait for 6 months before looking again, would be to ask for the money to be given back as this would be absolute proof that the money wasn't given as an unencumbered gift (as you or one of the other gifters still maintain some control over what they do with the money)