My husband and I are buying a property in London. It was on with Foxton's (hugely overpriced, obviously) and was on at £825k we offered £780k, the vendor wouldn't accept anything less than £800k. We upped our offer to £800k as we felt the house was perfect for us. Our Mortgage valuation has unsurprisingly come in lower....however what is surprising is that it is £85k(!) lower...we were expecting it to come in at about £760k.
The vendor still won't budge on price, Foxton's are adamant that there will be no negotiation....we could still afford the £800k...but my gut feeling is that we would be utterly stupid to over pay.

Any thoughts?

The vendor is getting quite agitated with us dragging our feet, which makes me want to buy the property less and less.