Getting rid of my shared ownership flat - how?!

Drysdale

I posted another thread about my general situation and debts but wasn't getting much of a response so Ive created this one aimed at my housing situation - hopefully will be of help to others in a similar situation with the responses as it seems lots of people in this situation due to the market.

I purchased my 1 bedroom flat on a shared ownership scheme in Feb 2008 with my ex-partner. Since then, we split up and I am now paying all of the mortgage/rent etc as she moved out and is no longer paying anything. I have a mortgage of £75000 which is a 50% share with a private housing association (Derwent Living) owning the other half. I pay them a monthly rental/service charge of £390 :mad: .

My mortgage is a 100% mortgage - we paid no deposit and due to the housing price 'crash' and the market in general, the flat is now valued at around £125,000. We are in negative equity by about £15,000.

The flat has been up for sale on the market since late 2009 with 5 estate agents. In that time I have had 4 (yes, FOUR!) viewings with no further interest. My estate agents all say the same thing - it is priced to highly (I am selling at a price to cover the negative equity as I cannot afford to sell for less) and also that the rent is too much and that there are more desirable flats nearby for cheaper.

I cannot afford to lower the asking price - I have a lot of unsecured debt (another story..) a poor credit rating (so cannot get out a loan to cover the shortfall) and have negative equity.

I have been told by estate agents it is going to be a long wait to sell, maybe even a few years and that I have to wait for prices to rise. I can't rent it out my money situation is rubbish and I cannot charge rent that would cover my expenses with renting another place/my outgoings for this place.

Basically, I feel like I have run out of options. I am depressed with my whole debt situation. I cannot stay anywhere else, I cannot afford to rent anywhere else whilst still paying this mortgage/rent and feel like my life is on hold!

I am considering a voluntary repossesion - does anyone have any thoughts on this? How would I go about it? I would love to just hand back the keys and not have to pay anything on it but that wont happen.

I am also trying to figure out how to do it all -even if I did hand back the keys, I have nowhere to stay and I cannot afford to build up a rental deposit! Arghhhh.

Would love a better response this time although I understand there isnt much advice that can be given

theartfullodger

Apologies in advance if this seem harsh but have you considered Bankruptcy?? After that was sorted you could start with a clean sheet again..

You've said you're £15k in negative equity &

I have a lot of unsecured debt

- so perhaps you've no prospect of paying all that off in (say) the next 2 years??

Hope it works out, best wishes

zzzLazyDaisy

Have you considered posting your SOA?

There are a lot of people on these boards with amazing talents for spotting ways of cutting down on expenses and living more frugally. If you do this, you will be in a better position to pay off your debts. Yes this is a long term plan, but as you are finding, there is no magic bullet in these situations.

Yes, you can put your house up for sale, but it isn't going to sell in a million years if there are more desirable houses for sale locally at a lower price.

It isn't going to help if you keep flinging yourself at the same brick wall. You need to look for another way to manage these problems.

Yes, you can go bankrupt. This will wipe the slate clean, but will have on-going repercussions for your credit rating, which in turn may make you less attractive to some landlords. But many people do it and are glad they took this step, despite the downsides.

Whatever decisions you take are going to hurt your lifestyle in some form or another. Even doing nothing is a decision that things are not going to change.

Sorry if this sounds harsh, that isn't my intention.

Daisy

taxsaver

I'm afraid that I too think you should give bankruptcy some serious consideration. I'm assuming you are still young, so you have far more 'life' ahead of you than behind and plenty of time to re-establish yourself once you have a clean slate. Seriously... sit down and take a long hard, cold lool at your finances and consider how long you will be before it's cleared.... then consider bankruptcy and the fact that in most cases that only lasts for one year; sure it'll show on your credit file for 6 years in total but you've already said that your credit rating is shot anyway! You can then take the lessons learnt and move forward more positively with your life again.

There is a section of this forum for people who are bankrupt or considering becoming so.

http://forums.moneysavingexpert.com/forumdisplay.php?f=136

I think you should not hand back the keys though as then you will be making yourself homeless, whereas if you file for your own bankruptcy and then are evicted I think you will get some help with housing, but people in the bankruptcy thread will be better able to advise you on that.

Good luck!

PasturesNew

She is also liable for the mortgage debt/shortfall. She might think she's walked away and that's the end of it, but if you go bankrupt she ends up with the shortfall and a trashed credit record too.

On this basis, she might be interested in contributing half the interest on the mortgage portion, at least, until it's sold - to try to minimise the chances of you going under.

Are you speaking or shrieking with her? It might be an option.

You're in it together - and she needs to realise this.

brit1234

Bankruptcy does seen a viable Option.

The problem with shared ownership is first time buyers are increasingly seeing it as a scam. So you will have less interest. Also if you can't afford to drop your price in a falling market then you have no real chance of selling. The few buyers out there with deposits are holding off for cheaper homes later on in the year.

Trollfever

As above - check out the Bankruptcy Board.

https://forums.moneysavingexpert.com/discussion/comment/6260729#Comment_6260729

Drysdale

Thanks for your replies everyone!

RE my SOA - I have been through the whole CCCS, dmp thing and found that again it didnt really help my situation and found that I was kind of living on a 'knife edge' with the amount I was paying to CCCS for various reasons and also that I don't trust CCCS anymore as they have basically lied/misled me and some of my creditors telling them that they will receive a payment on a certain date even though we agreed a completely different one.

I would LOVE to go bankrupt - maybe love is too strong a word, but bankruptcy I have definately considered. I am in my early twenties so even if I did go down that route I would still be in my late twenties at the end of it. I do not intend to buy again anyway for a long time - too bad an experience with shared ownership/house prices first time round.

The problem is my job - I am in a role which I have been specifically told I cannot go bankrupt as one of my employment conditions. There have been exceptions - I know of several people in the past that have done it and kept their jobs.

Re my ex - she has put herself (and in a small way myself..) in this position - we sat down together and had the affordability for the mortgage based on our joint income. I could not move out of the property as I had nowhere else to stay, but she had family locally and moved back in with them. I will obviously tell her of my intentions if I do go down the bankruptcy route/voluntary repossesion but to be honest, for both of us, I think we just want to end this 'saga'. To think I could be in a joint-mortgage/tenancy with her for another 3-4 years is bad enough!

I think I will speak to my HR department at work about the possibility of bankruptcy and explain my situation - if it is a no-goer then I will have to look at voluntary repossession.

Trollfever

I think I will speak to my HR department at work about the possibility of bankruptcy and explain my situation

A priority IMHO.

poppysarah

PasturesNew wrote: »

Are you speaking or shrieking with her?

Nicely asked.

waribai

You also have neglected to mention your gambling habit which you mentioned in another thread. The fact that you were gambling with money that should have gone towards your priority debts, I would have thought that getting some counselling in relation to this could be important too.