Negative Equite Sales and Savings - Please help

mcinsley

We have been trying to get some good advice on how to manage our proerty situation and don't know where to go. Can anyone help, or point us to the right advisors.

My wife and I both have good professional jobs. We acquired our new build flat in August 2006 for £249,000 with a mortgage of £234,000. We estimate that it is now worth £160,000.

There were various teething problems with the new development which caused the equity drop. This has been exarcerbated because a huge percentage of resdients are not paying their service charge and the management company has ceased all services. Therefore it is getting dirty and falling into disrepair. We cannot see how this situation will improve.

We have been steadily overpaying our mortgage and have got it down to £181,500. We also have £45k in savings. We need to move out and sell-up because the state of the development is getting so bad that it is not an acceptable place for our family to live. We spend our lives fighting and threatening the managing agents with legal action to no avail. We have even tried launching a Right to Manage to sack them, but because there are now so many absent landlords it is impossible to get the 50% vote required to remove the current agent. The stress of fighting them and dealing with our financial situatio is starting to impact our health.

Does anyone have any ideas as to how we can remedy this, or even who we can talk to for advice? It seems that as strong earners, with savings and having made over payments on the mortgage consistently there must be an intelligent way out. Any ideas?

haras_nosirrah

You need to put your health first. If it is really that bad I would say put the property on the market and try to sell. The lack of a management company may make this very difficult owing to the enquiries your buyers solicitor will raise so auction or renting it out may be another option while the situation stabilizes.

What do your neighbours say? Do the properties belonging to absentee landlords have tenants? They must have their address or the agent dealing with it will. The problem you have is that if no one is paying then they will not work and if they won't work then no one will pay. It is a vicious cycle that needs to be sorted. I am sure that if tenants are put off renting owing to the state of the communal areas the landlords will want to get this sorted too.

Good luck op.

mcinsley

Just to clarify we do have a managing agent. It's just they're failing to do anything more than pay the buildings insurance, electric bills and "emergency repairs". Thank you for your help.

beecher2

Sell up, rent and build up your savings again - renting out the property would still leave you with a lot of stress. The building's only 4 years old so I wouldn't have thought you needed much more than buildings insurance, electric bills and emergency repairs - unless there are problems with the quality of the build?

mcinsley

Thank you. This is what we're thinking. We're pretty sure there are no structural issues.