Stuck in a 1 bedroom flat - is there anything we can do?

Fly_Baby

Dear Essexgirl81, apologies if I am touching a sensitive topic here - I thought somebody would mention it before me - but if you are considering moving in with your Mum as an option, then do you think that your mother might be willing to reduce your rent? Seeing as you are struggling financially and charging you £400 plus council tax for a room - when a 1-bed flat would rent for £500 as you say - isn't that a bit too much and not very considerate of her?

Again, I don't mean to offend your mother but I was just curious how you felt about it...

Walter_J

barnaby-bear wrote: »

This is such rubbish. Mortgage debt is 12 year liability. Such actions shoot credit records to pieces - an approved personal loan to pay off the negative equity wouldn't. In addition to the shortfall there would be additional fees for the legal work of reposession and security of flat until sold (maintenance checks/visits etc). Plus the mortgage company will take any plausible offer and the OP would have little control over how low they drop.

Which is exactly why I was suggesting bankruptcy as a positive move.
Maybe not in Essexgirl's particular case, but for many in a similar situaton.

Which is preferable, being trapped living in poky flat with a child for the next ten years or so while paying £750 pm for the privilage, or having all your liabilities wiped clean at a stroke and being able to rent a suitable house with a garden for less money?

There is not even an ethical dilemma. There is absolutely no moral imperative to repay a bank loan.

Banks have no morals.

Essexgirl81

Fly_Baby wrote: »

Dear Essexgirl81, apologies if I am touching a sensitive topic here - I thought somebody would mention it before me - but if you are considering moving in with your Mum as an option, then do you think that your mother might be willing to reduce your rent? Seeing as you are struggling financially and charging you £400 plus council tax for a room - when a 1-bed flat would rent for £500 as you say - isn't that a bit too much and not very considerate of her?

Again, I don't mean to offend your mother but I was just curious how you felt about it...

The rent amount is payable to the council as my mum is currently in receipt of housing benefit due to being a carer for my disabled sister.

Walter_J

patchwork_cat wrote: »

Some people are saying oh you will be stuck in that flat until your LO is a teenager- rubbish. This is a dip, there are peaks and troughs in the housing market we are in a trough it is temporary and would seriously doubt that it will last more than a couple of years. I would predict that you will not be in negative equity by the time your LO is 5.

You are obviously very young or have a bad memory.

The last time that house prices fell for a prolonged period was in 1989. They continued to fall for 4-5 years. They then stagnated before starting to rise slowly again. It was 1997-98 before the values of 1989 were reached again.

This crash is far worse. Prices will fall much further than they did last time and will take a lot longer to recover - if indeed they do. House price inflation is entirely dependent on readily available credit. It is probable that the banks will keep credit in short supply for a generaton or more, following the near collapse of the whole system last year.

I don't think that it is unrealistic to suggest that Essexgirl's daughter will be a teenager before the flat is out of negative equity.

clairehi

Just an idle thought but there is not much difference between rents for 1 bed and 2 bed flats.

is there any chance the OP could let out their own flat and find a 2 bed to rent for similar cost.

(I still think they need to generate extra income somehow though. Saving a few £ here and there is just not going to be enough)

patchwork_cat

Essex girl you would only have to pay non dep charge not the rent if you move in with your mum roughly £47 a week

shirlgirl2004

Hi Essexgirl there's an ad in the local free paper this week saying they need temporary people to deliver the Thomsons directory. Obviously being flexible hours you could do it at the weekend. Might be worth a trip to the library to look in the papers or if you want the number let me know and I'll dig it out for you.

WillowCat

Hi Essexgirl -

have I got the wrong flat, or have you taken the plunge and dropped to £100,000?

Good luck with the sale

Essexgirl81

Hi all, I posted this earlier on the HPC forum and it's relevant here too:

Just to update you all -

I got in touch with the mortgage company today to ask advice about what really happens if we sell in negative equity.

They were very helpful and understood our situation. They said that it would go in our favour that we have continued to meet the monthly repayments and have no foreseeable trouble in doing so.

Basically, they were sure that we could work something out once we had an offer of some kind. In response to this I contacted our estate agents and asked them to reduce the asking price to £100,000. Straight away she said that she had someone who would be interested in spending that amount and would get back to me hopefully with a viewing time!!

I did ask my husband first, in case any of you were wondering, and told him what the mortgage company said as well. True to form he was still reluctant to do anything but I was a bit blunt with him (sorry to say) and pushed the point across. I know that I have mentioned it but I really don't want us to split up so perhaps i'm having to be a bit cruel to be kind nowadays. The fighter in me is re-emerging I think - about blimmin' time!!

I do feel a little lighter now I have set the ball rolling again as opposed to it being stuck in a big pile of metaphorical moss!!!

So, now we just have to wait and see really. Many thanks again to all those who have replied. It has been a big help to hear your opinions on my situation and has put a lot of things into persepctive.

poppy10_2

Essexgirl81 wrote: »

I contacted our estate agents and asked them to reduce the asking price to £100,000.

I wouldn't have gone that far! :eek: That's quite a fall. The problem is any bidder worth their salt is going to try to negotiate at least 10% off asking price, so you might have been better off cutting to £115k or £110k at least for a week or two to test the waters.