Please please help and advise

BlueSkyProspero

I would be so grateful for some help and encouragement as feeling pretty rubbish about my situation. My statement is below. To explain a few things:

• I own a flat in the South West where I'm originally from. I have been renting the flat out for £700 pm until last year when it developed a serious damp issue and leak and this has rendered it uninhabitable.
• I am now not renting it out and have spent all my savings / built up debt trying to fix it. I live in London and it's been really hard trying to manage this at a distance. I don't have family who can help me out with looking after the repairs.
• So at the moment I am paying the mortgage on the flat I own, and also my rent in London.
• I work as a teacher in London - very pricey - and live in a rented 1 bed.

Credit cards x 4 and overdraft debts amount to £12,000 total and I am paying each off at £1 a month right now through Step Change.

Income from employment £1,980.27
Rental income from own property £0.00
Rent £1,256.67
Mortgage (own property) £380.00
Gas & Electric £30.00
EDF electricity (own property) £20.00
Water £33.35
Broadband £21.40
O2 mobile £25.00
Council Tax £90.00
Contents Insurance £14.00
HMRC NIC £11.00
Tesco Bank Credit Card (Step Change) £1.00
Santander Credit Card (Step Change) £1.00
Partnership Card (Step Change) £1.00
Lloyds card (Step Change) £1.00
Overdraft (Step Change) £1.00
Buildings Insurance £15.00
Travel £30.00
Groceries £100.00
Pubs & off license £0.00
Eating Out £0.00
Theatre & cinema £0.00
homewares, clothes, books, music £0.00
Amnesty International £1.00
Other (one-off) £0.00
Holidays / Trips £0.00
Prescriptions £11.00
Dentist £0.00
Optician £9.00
Hair £0.00
Clothes £0.00
birthdays £0.00
Total Monthly Expenditure £2,052.42
Income - Expenditure -£72.15

I am hoping to try and get a loan from a family member for the mortgage repayments up until the time I can fix the flat and get it rented out again, or on the market.

Obviously if I can do that it would help me, but I will still have to pay that loan back at some point.

I am also being charged council tax there but trying to get a reduction as the place is derelict.

My main priority is getting the flat fixed and off my hands. But in the meantime, any suggestions? As you can see everything is really tight and I find it very emotionally hard and depressing - just the small things like not being able to go out for a drink with my bf or get bday presents for friends. And I haven't had new clothes in ages which I used to enjoy. same old story I know!

Any help or advice gratefully received! Thanks all

mummyyum

Could you not just sell the property you own as it stands and then buy a flat in the suburbs of London with a new mortgage?...That is of course if you have any equity in it...

BlueSkyProspero

Thanks for your reply. The flat would sell for a loss in its present state so it's just not an option for me at the moment.

enthusiasticsaver

I would actually say your biggest problem is the amount of rent you pay on a flat in London. Is it not possible to move to a cheaper part of the country if you are a teacher? Long term you may have to accept that you do not earn enough to live in such an expensive area. Almost 65% of your income is going on rent which is unsustainable long term unless you are in line for a promotion/wage increase. The rest of your expenditure is so tight that I can totally understand why you are finding it tough. How much would the shortfall be on your flat were you to sell now in its present condition? You need to weigh up the cost of fixing it against the added value you would gain on the sale.

BlueSkyProspero

Thank you! I believe I would lose about £20K off the price were I to sell it, plus what I've already spent on repairs. On the other hand, smart flats on that road are selling for an extra £20K or so than I paid for it - so I do think it's worth it in the long run. Of course if it doesn't sell or is valued at less than that, then if I can get it repaired and let it out it solves my income issue.

With regards to the London issue - yes it is so expensive to live here and living alone. My whole life is here though - I have lived here since I was 17 and I have my own alternative education college in London which I am CEO of so it's really not feasible to move.

I am simultaneously trying to develop the college funding so that I am able to pay myself a higher salary!

Hope it doesn't sound as if I'm blocking your suggestions by the way - which are all really good ones.

aznlayer

could you lodge in a room instead of renting a flat.


I know its not ideal, but when I graduated I lodged with a colleague for 2 years and only paid £300 per month (this was Sheffield, not London). I didn't have to pay any bills on top and was able to save £15k to clear debts.

rockm87

Are you able to boost your income? Could you work some evenings or weekends? You're in London! there must be something.

Handing out leaflets, delivering takeaway, waitress, anything to get your income up temporarily.

Or use your skills and see if you can tutor, grade papers or proof read??

Youre screwing yourself further into debt, you'll lose alot more than £20k, is you dont address the problem.

best of luck!!

HappyMJ

You're going to need a lot of money to do the flat up. As you're paying £1 a month to your creditors it's extremely unlikely any lender will give you the funds you need to complete the works on the property.

Instead of borrowing the funds from the family member how about just selling the property to them so they can do it up and sell it on?

You've said the property is in negative equity and each month that goes by you are losing several hundred pounds. I'd sell it and then get a debt relief order to get rid of all your unsecured debt then start over.

You've not got TV licence in your SOA.

Your rent is also very high. If you were to move away from your current flat you could drop your rent down to £600 maybe £700 but also at the expense of increasing your travel costs from £30 per month up to £145 per month assuming you move to Zone 3 and use the tube to commute to Zone 1. You would save quite a significant amount. I would also consider a flat share which would bring your monthly rent down to £450 and the council tax would be reduced to zero as that's included in the price you pay for the room. You're already paying very little in electricity and gas so I doubt that could be cut any more. Your share of that bill would remain at £30 per month. You might find broadband is included with the room and you could reduce that to zero. London although a nice place it's just too expensive a place to live by yourself.

Pixie5740

I know you've given some figures in your OP but it would help if you put together a full statement of affairs.

http://www.stoozing.com/calculator/soa.php

I agree with the suggestions to rent somewhere cheaper whether that's moving to a less expensive area in London, becoming a lodger or going into a house share. Your rent is very high in comparison to your income.

A_Frayed_Knot

I'm sure I read somewhere that if you were renting out property and it wasn't occupied(empty) then you can apply to your electricity company and they will not charge you the standing order for supply of electricity.

Maybe someone on here know for certain, but worth looking into, and you can get a reduction on council tax but bad news is they have a limit on time, then goes back to full (less maybe single occupancy) unless of course you can get a student in there, where they don't pay council tax.

There could also maybe other packages you could look at re; broadband and mobile. I also see you have buildings insurance, your problem with your rental property - would your insurance not cover this? and I normally would not suggest this, but anyway you could take your mortgage out over a longer period, giving you a bit of breathing space.


All other suggestions have been made here, move to a cheaper rental, get extra hours/job/private tutoring etc, all good suggestions.

Willowpop

London rent prices suck don't they?
Is it possible to move to a cheaper property?
I'm not sure where you are in London, but sometimes a neighbouring area can be a little cheaper...or possibly a flatshare? That might free up a bit of money for you if you can get that expense down.