Negative equity for 10 years can anyone help!

djam

I bought my 1 bed apartment as a new build and first time buyer in 2006, the market crashed and was told to wait before selling as my property was in negative equity by £20,000 I've had to rent the property out but can't afford to keep it! After 10 years it's still the same negative equity and as I was young and naive I clearly overpaid for the property but clearly shouldn't have been given a mortgage for the higher amount! Is there anything I can do? I really want to sell it to buy a new property to live in but can't afford to try to find an extra £20,000 to offload!

ACG

Unless your Mortgage advisor was mystic meg, they could not foresee the market crash coming. You paid the going rate for the property at the time. The price was agreed by you, the developer and the lender.

Its unfortunate, but if prices had doubled would you be making this post?

HappyMJ

djam wrote: »

I bought my 1 bed apartment as a new build and first time buyer in 2006, the market crashed and was told to wait before selling as my property was in negative equity by £20,000 I've had to rent the property out but can't afford to keep it! After 10 years it's still the same negative equity and as I was young and naive I clearly overpaid for the property but clearly shouldn't have been given a mortgage for the higher amount! Is there anything I can do? I really want to sell it to buy a new property to live in but can't afford to try to find an extra £20,000 to offload!

You could stop making mortgage payments keeping the rent payments you get for yourself and allow the property to be repossessed. You could then declare yourself bankrupt. Then you can spend the next 6 years saving as much as you can and then re-enter the property market.

Apart from that no you have no recourse against the vendor for accepting your offer. You made an offer for the property which was accepted. Your mortgage provider agreed it was a fair value which it may have been at the time.

Caz3121

djam wrote: »

After 10 years it's still the same negative equity

Are you on an interest only mortgage or are you saying that the property is continuing to drop in value in line with the amount you are repaying to off the repayment element of your mortgage?
Did you look at overpaying at any point to reduce the negative equity?

brit1234

ACG wrote: »

Unless your Mortgage advisor was mystic meg, they could not foresee the market crash coming.

Many of us saw it coming, all the indicators were there, the same indicators that are there today. The original poster isn't alone and is being joined by people who bought at stupid prices in the South East and London at crazy prices in 2015 before the market started turning.

A good indicator is looking at what is happening to builders share values and independent economist review of what is happening to those shares. Also estate agent shares and analysis is also a good indicator of strength of property market.

Mahsroh

I've had a similar problem albeit not on the same scale as yours by the looks of things. I also (still) rent that property out though i'm slowly moving into 'profit' territory!

I don't think you have much choice other than to 'sit tight'

Why do you say you can't afford to keep it? Can you give us some specifics (mortgage / rental income / expenses)?

I'm guessing it's either interest only or you took a 100%+ mortgage at the time for it still to be in negative equity? Are you sure about the current value? Have you had it valued?

Thrugelmir

djam wrote: »

I bought my 1 bed apartment as a new build and first time buyer in 2006, the market crashed and was told to wait before selling as my property was in negative equity by £20,000 I've had to rent the property out but can't afford to keep it! After 10 years it's still the same negative equity and as I was young and naive I clearly overpaid for the property but clearly shouldn't have been given a mortgage for the higher amount! Is there anything I can do? I really want to sell it to buy a new property to live in but can't afford to try to find an extra £20,000 to offload!

You could have remained in the property and paid down the capital debt owed. Your choice not to.

Mahsroh

I'm assuming in the absence of any responses to questions you're no longer looking for help or advice OP?

silvercar

Selling actually crystalizes your losses. Not sure that is a good thing to do at this point in time.