Bought Off Plan....but Cant Afford It Now!!! Please Help!!!

neas

Im not gloatig.

Just stating the obvious, your financial decision could have provided you a custy living and extra income for no real extra work... BUT it has now gone tits up so to speak and so you must pay for the risk going bad.

Or should we allow you to take the financial decision with no risk... and therefore you gain nothing or gain alot?..

Where in reality... your decision was a risk based one.

1. Was a chance you would make alot of moeny, have someone pay for your flat after 20-25 years... and be made that much richer for it
2. Was a small chance you could own a negative equity flat.... with little to no chance of finding a tenant.. leading to financial hardship and maybe bankrupcty...

You took that chance, if you were too naive to think about it.. then how did you expect to become rich so fast?. BTL was the 'get rich quick' scheme of our day.

sandy_smith_2

transfer all your assets to the wife or another family member and then simply tell the company you can't pay and invite them to sue. I bet you they won't anyway.

Super_Ted_2

Entertainer wrote: »

But you can't blame them for it in a moral sense which is the reasoning behind this schadenfreude. They were providing rented property and they were acting legally. It was those making policy who have contributed to this slump the most.

Acting Legally yes, morally no.
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People farming by buy to let scumbags is reprehensible.
The fact is that this guy thought he could mortgage the income of his future tenants to provide him with a "second income" on the back of their labour. As others have pointed out if the housepricecrash had not happend when it did this person would be gloating about being a property investor / financial genius in a few years time.
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As it is he should be thankfull we have such a thing as bankruptcy in this country and thank his lucky stars karma didnt bite him harder.
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He thought he could get one over on others and he got done himself...good.
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In any great con trick there is a patsie, OP, ....thats you that is.
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ST

amitabh1

Well my conscience is clean and so were my intentions. if you or anyone else has a problem with that then im sorry, i have my own to deal with.

Hectors_House

Entertainer wrote: »

Everyone who is revelling in this guy's misery should take a good hard look at what they are saying. He's been very foolish, he knows that but he did it with positive intentions and you showing schadenfreude towards him is unedifying. It is not BTL landlords who are responsible for this housing slump. It's like saying if you've got a job you're depriving someone else of one and you should be ashamed of yourself. If the government's housing policy is so bankrupt that it has brought the market to this then blame them.

If you were holding down more then one job you would be damaging the people around you.

I've seen houses around my area that are suitable for FTBs get snapped up by BTLers who then move disruptive tenants who like to party all weekend long once they find the 24-hour Tesco around the corner.

poppy10_2

Oh god, cut the guy a break. He's admitted he made a mistake and was stupid to end up in this position. Now he's come here to ask for help. I love BTL schadenfreude as much as the next guy, but the way everyone is beating up on him is just mean

fatpig_2

you should have bought 4 instead of only 2 and made twice as much money

HelpWhereIcan

PasturesNew wrote: »

It was the bond company that threw me. I've not heard of one before and have no idea what their connection is to this scenario.

An exchange bond is a company that provides an insurance policy that will pay the required exchange deposit (normally up to 10%) to the developer if the purchaser fails to complete.

It prevents the buyer from having to pay over the deposit far in advance (thus losing its use and interest) and is great for investors with cash and people who are relying on selling a property to pay their deposit, but has often been used to cover those people who don't have the money to put down in the first place (not a great idea really).

What this does mean though is that even if the OP does not proceed, the developer will receive their deposit and will be happily able to re-market the property knowing that their 'loss' has been mitigated a little.

Unfortunately, this means that the developer may not be as inclined to re-negotiate the price or terms as they might have been otherwise.

If you don't complete, the Exchange Bond company will pursue you for the money they pay out but this may be ultimately preferable to having a property repossessed at shortfall meaning that your own home goes from being potentially at risk to being definately at risk.

With regard to mortgage options, there will be some but from the sound of it you are unlikely to qualify as you will not have extra funds to commit. However, it is always worth asking someone to have a look for you just in case.

In cases like this, the best option all round tends to be finding someone who will take the property on for you. This should be acceptable to the developer and should not trigger the exchange bond.

I do not know enough about your properties and their valuations, but from what you have posted

amitabh1 wrote: »

The mortgage value will be £182000 - 15% = £155000. .. Rental estimations are only £650-£700. ...The same flats in the area have dropped in price massively.

The £700 pm rental income would probably cover a BTL mortgage of around £97500 to £105000 which would probably mean that you woud get an offer of no more than £140,000 ish from a 'cash rich' investor (assuming that the properties are easily let and stack up otherwise).

That would give an investor a ROCE of around 2.78% which I am afraid to say will not be enough to atract the type you need (one of mine currently targets 10% ROCE and has plenty to choose from - have arranged 2 deals like this for him this week).

So, that puts us back to pulling out of the sale and allowing the exchange bond to kick in.

They will chase you for the difference and you will either have to come up with money (from a remortgage of your own home, savings, a loan etc) or consider negotiation with them on a monthly payment as that is what a court is likely to order.

If they get a CCJ and charge on your property you own home could be at risk. However, as long as you keep to the repayment schedule ordered by the court this is unlikley to happen.

Declaring bankruptcy could be an over-reaction and is not something to consider lightly even though it is a common course of action 'advised' by people on this board despite not being the only option for people with a shortfall or a debt built up in situations like yours.

If you are lucky, the developer may be willing to reduce the price, give you a further discount or even release you from the sale so it is always worth asking.

As has been suggested, get some legal and financial advice NOW. There is unlikely to be an easy way out, but there will be no point in making it harder by not taking the time to look at all options.

Good Luck

huntersc

Amitabh1, ignore the idiots having a go at you. You're obviously in a lot of trouble here and need support, not gloating. You've made a mistake, realised it and come for help, good on you.

So I've got my fingers crossed for you, unfortunately I don't have anything else to offer apart from good luck. Speak to a good solicitor, I really hope you can get out of this. Good luck mate.

TTMCMschine

amitabh1 wrote: »

Well my conscience is clean and so were my intentions. if you or anyone else has a problem with that then im sorry, i have my own to deal with.

There will always be a lot of bitterness on threads like this, because there are so many people who've been priced out of the market and ridiculed by others because they haven't mortgaged themselves to the hilt. I know you say you were earning an honest wage so to speak, but there will be many on here who believe you were one of many who've fueled the situation we're in now. There are many who think you did this as easy money, and maybe not the "investment" you believe you were sold. I'm afraid i can't distinguish between what your intentions were so i'm not going to say. I don't envy your position right now, but sadly this is the next in a long line of things that people shouldn't get involved in.
I can't say there haven't been nights when i haven't been screaming "when is this madness going to end", but i do think there are some who are lucky to have foresight in this. It's easy for me to say "He was foolish - how stupid he shouldn't have done that". I am left thinking there but for the grace...because now things are finally changing, i was lucky enough to marry a man who has forsight, and enough synicism to spot a few trends.
I agree research is vital, but there are times when i have had so many people who i respect, or have been successful saying property this, property that. I think in crazy times like we've just had it is very difficult to (without sounding cheesy), and think outside the box. I can fully understand why people are angry and a bit catty about this, i've been priced out for years and still am. There's no one more i'd like to punch the lights out than kirsty and phil. But i personally think you were lucky to have the insight. While no one is ultimately to blame but the buyer - i think it isn't that easy sometimes to know whether you've done the full research. It is easy to think you're doing the right thing, because everyone else around you is. It's easy to take things on face value, because they seem so right. Anyway he's got the anguish of having to sort it out, that i don't envy - hope you get it sorted. At least you've learnt one of life's very valuable lessons, the type that only come along once every so often (sorry for very long post).