Help on property problem

janfrog

Hiya Can anyone help with this problem as I cannot sleep at the moment with worry.

My husband has a flat which he used to live in before we got married 4 years ago.
It was rented out for a number of years and then the tenants left three months before they should have (we have a claim with the letting agents through the property ombudsman)

Since December 2011 he has it up for sale and have dropped the price so low it would just cover the mortgage repayment but had no interest at all. He decided to rent it out again BUT were informed by the mortgage lender he cannot do this as its against their rules ( the ML is an american assest buyer whom the mortgage was sold on to by the previous ML)

He has offered it back to the council who he purchased it from in a right to buy scheme but they are not interested.

He has now been informed by the same local council that the Council Tax exemption no longer applies and they want £109.00 per month council tax eventhough its not let. He has spoken to them and they say theres nothing they can do.

A house cash buyer has offered an amount that will still leave him with £10,000. short of the mortgage repayment.

So we are paying out £400. per month for something we cant let or sell and we cannot afford to keep doing this as we are borrowing money from anywhere we can to cover it.

PLEASE IS THERE ANYONE OUT THERE THAT CAN OFFER ANY HELP OR ADVICE ?

FireWyrm

Ok there are a number of possibilities.

1) why don't you change mortgage lenders?
2) if you are truly trapped, what other assets do you have? Do you own a house? If so there are a number of options, one slightly more drastic but would probably work out in the long run.

Either, you sell the flat at a loss and take the hit for the shortfall, or, and here's the radical bit, you sell your house and move to the flat. Take the money from the sale and put into a high interest account, bond, ISA or investment like gold and sit on it for a few years. House prices are going nowhere for the next few years, so don't panic about being priced off the ladder, I seriously doubt it would happen. Give it a few years and then buy a new house with your original asset money plus the interest, sell the flat and immediately arrange to pay a massive lump off your mortgage. At the moment, the flat is of no use to you and is draining resources. It's also at risk of illegal occupation so I would be down there checking regularly. Squatters like lice are best dealt with by vigilance and prompt action should and infestation be identified.

Now, this plan takes some discipline. It is critical you don't spend your asset money from the house, but if you can manage it, it's sort of like stoozing only for houses instead.

[Deleted User]

Have I missed the point - why can't you just rent it out again?
I know they left early - but still this happens all too often right?

I was of the impression that if you are working on the property. i.e. bringing it back to basic standards there would be a reduction in council tax for a set period. Maybe you do need to bring the standards up (for the sale) and even if you don't can you find a small project maybe some leak or something needs fixing???

FireWyrm

assj wrote: »

Have I missed the point - why can't you just rent it out again?
I know they left early - but still this happens all too often right?

I was of the impression that if you are working on the property. i.e. bringing it back to basic standards there would be a reduction in council tax for a set period. Maybe you do need to bring the standards up (for the sale) and even if you don't can you find a small project maybe some leak or something needs fixing???

Because they don't have leave to rent from the mortgage lender....

And...typically, the council tax rebate is only for 6 months and only while the house is unfurnished. My guess is that the period ran out and now they can't relet because of the reason above.

[Deleted User]

Sorry missed that bit - I know many people that have done it anyway, especially where 10K is involved - or as you say change lender and then it should be ok.

FireWyrm

assj wrote: »

Sorry missed that bit - I know many people that have done it anyway, especially where 10K is involved - or as you say change lender and then it should be ok.

Best not to tenant the house without leave from the lender. It is fraud and they may very well foreclose on you leaving you in a much worse situation than you started in. Besides that, you have to declare your income to the HMRC who now openly liase with mortgage lenders in this regard. The lender WILL find out and HMRC will nail you to the wall for the lost income tax.

janfrog

Thanks very much for all your replies .

Husband is going out today to see if he can get some buy to let mortgage advise and also check with a few more cash buyers to see if we can get a better price to bring down the £10,000. shortfall.

We had looked at moving into the flat but as its a tiny one bedroom, with no garden ( we have two dogs) Also its quite far away from my job and as had to get rid of my car because cant afford to have one anymore and it would involve getting two buses each way we have decided against that option.

Again many thanks for all your help..hopefully by the end of this week there might br a chink of light on the subject!!:o

FireWyrm

Sometimes radical problems require radical solutions. I used to bike (on a push bike) 8 miles each way to work - 16 miles round trip 5 days a week. Apart from keeping you incredibly fit, it's virtually free and I guarantee you'll beat the buses every time. If your work place isnt that far, say under 20 miles, it's something you might like to consider as a short term option.