Stuck with flat, don't know what to do

Fire_Fox

145dude wrote: »

Thank you every one for the replies. A mixed bag and all reflecting the scenarios I've been thinking through myself.

I should have provided a little more detail, it's a 1 bed flat in the South East and definitely a first time buyer kind of place, which is against me as I cannot see how any FTB could possibly get a mortgage right now or the immediate future. Property prices have risen in the area however unless FTB can get mortgages it's kind of a moot point I think.

It's true, topping up an IO mortgage is unfortunate, but if I were to try and sell I don't even know if I'd get enough to pay off the mortgage (it'd be a couple or few thousand at most, but still), let alone worry about seeing any of the deposit I'd put down. Hence the dilemma. Do I revert to repayment, put the money I'd normally put aside for a pension towards to the mortgage payment or cut my losses and lose the £15k (plus all the additional £ I have used, mortgage payments thus far, etc).

I don't know if I'm throwing good money after bad or whether long-term it'd be worthwhile. Plus regarding the comment about the ability to cover the mortgage if without a tenant, yes, I could do this (it'd leave me quite short!), but it would feel like throwing more money at the flat that I am already "subsidising".

You haven't answered the question as to whether you have consent to lease from your lender? If not you may be required to convert to a BTL mortgage or at the very least revert to repayment and pay a fee for consent. You have already lost the £15K, just because you still own the flat it is not worth what you paid. On the bright side anything else you purchase in the future will also have fallen in value.

145dude

Thank you for your post property.advert.

The present let on the flat expires at the beginning of September and the present fixed-rate mortgage expires mid-Oct, so the two dates are close.

I live in my partners flat so I am "OK" in that respect, but of course I'm not able to contribute quite as much as I would like to "our" costs.

The figures I quoted were a bit rough around the edges but the present fixed-rate is 5.43% so the figures I quoted were not far off. However, as I am bordering on negative equity, I'm unsure just what deals I would be offered. If the rate was to go the other way then I would be stuffed!

The rental rate is/was due to a glut of flats that were available at the time for rent due to many other people being in very similar circumstances to myself. My tenant paid 6 months up front (which was good to put my mind at rest for a few months) and has renewed for another 3 months and that takes us up to September.

Thanks again.

145dude

Fire_Fox wrote: »

You haven't answered the question as to whether you have consent to lease from your lender? If not you may be required to convert to a BTL mortgage or at the very least revert to repayment and pay a fee for consent. You have already lost the £15K, just because you still own the flat it is not worth what you paid. On the bright side anything else you purchase in the future will also have fallen in value.

Yes I did and did have to pay a fee.

Who knows what will happen in future. Hindsight would be a wonderful thing, but so would the ability to predict the future! But right here right now I'm stuck in 2 minds!

Fire_Fox

145dude wrote: »

Yes I did and did have to pay a fee.

Who knows what will happen in future. Hindsight would be a wonderful thing, but so would the ability to predict the future! But right here right now I'm stuck in 2 minds!

History strongly suggests that property is a sound investment long term. Unfortunately a lot of people buy starter homes thinking they can turn a profit in the short to medium term but - as the events of recent years have highlighted - this is a gamble. I made a paper profit of 50% on this flat from 2004 to 2007, but 'lost' it all in the crash. :eek: If you can hold onto your flat ten years + you should make a profit, twenty years and you could have a nice retirement property. If you are wanting to buy a place with your OH it might be best to cut and run rather than risk the market falling further before it rises.