Buy to Let Limbo

bboy22

Hi there

I'm desperately looking for some advice regarding my mortgage. I bought a property for £170k in Aug 2007 with a £25k deposit and a £145k 4 year fixed rate repayment mortgage with a 35 year term.

Unfortunately, due to work commitments I had to move away at short notice from the property in August 2008. My lender, Skipton, allowed me to let my property to some friends and at the time the rent I received was just about covering the mortgage.

However, since then my fixed rate term has come to an end and I have reverted to the Skipton base rate of 5.95%. My monthly mortgage is now £825 yet I only receive £620 in rent a month (it is now let to tenants through a letting agent).

I am unable to get another buy to let mortgage as I don't have enough capital invested in the property so at the moment am losing over £200 every month. The outstanding balance on my mortgage is approx £137k and I belive the property is now only worth about £157750 based on research (although I will get a proper valuation).

To complicate things, I have just got married and now have about £6k of debt to clear, which should take me about a year.

Once that is cleared, my wife and I will be looking to save for a home. However, we definitely won't be returning to Bournemouth where my property is. I just don't know what to do for the best! Is it best to just sell the place and take a hefty loss, or forget about selling it (whilst losing £200 a month) until my wife and I are able to buy in London in a few years time?

I guess this is the peril of buying when the market was at its peak and then getting stuck on a buy to let mortgage.

Any advice gratefully received.
Tim

ACG

You could look at this in a different light... not that it will help your situation, your currently only paying a £200 a month mortgage for a £160k (ish) property.

(sorry im just trying to put a positive light on it). Unfortunately im not sure whats best for you so cant really help on that front.

Jimbo1976

Looks like you are on a repayment mortgage, which on one hand is good as the £200 you are paying is bringing your mortgage down (slowly but steadily) so as ACG says your tennants are paying the interest.

Did you ask Skipton if you could convert to an interest only loan? The advantage is that your payments would go to about £680 so slightly down, the downside is that you would not be repaying your mortgage debt.