Interest Payments about to finish and NO ENDOWMENT!!!!

noseymum

Hi there,
I'm an "assured long term tenant" and my rental payments have been paying my landlords "Interest only Mortgage" for 17 years.
In September 2008 (this time next year) the interest only part of the mortgage finishes and the amount borrowed is due to be paid.
The landlord has told me that he had an endowment policy originally but that he let it lapse years ago as he couldnt afford the payments!
Is that possible? Isnt he under some sort of obligation to pay them?
If this is true does it mean that the mortgage lender will re-possess the property and evict me and my 2 children?
I have never been in debt or missed my rent payments in all of the 17 years I have been a tenant.

EdInvestor

noseymum wrote: »

The landlord has told me that he had an endowment policy originally but that he let it lapse years ago as he couldnt afford the payments!Is that possible? Isnt he under some sort of obligation to pay them?

It's quite possible.

If this is true does it mean that the mortgage lender will re-possess the property and evict me and my 2 children?

The mortgage is probably quite small if it was taken out nearly 20 years ago, so the landlord may have other savings to use to pay it off.Alternatively he may just extend the mortgage - he can claim the interest against tax, so it can be a disadvantage to pay it off.

As to your own status if you are a sitting tenant, check with the CAB.I'd have thought you can't be evicted, and thus repossession is very unlikely as the lender would be unable to sell the property for much.

noseymum

Thanks for your reply,
the amount owing is 55,000 approx and the property is now worth about 150,000 -180,000 approx.
My landlord is vague about his finances,at best.
I have had to do all my own repairs to the property in the 17 years as he always pleads poverty when I try and get anything done.
I have tried to find out more info on "Shelters" site.
Apparently the lender can evict me to recoupe the money from my landlord.
Is he calling my bluff to get me to leave the property so he doesnt have to sell it with a "sitting tenant"?
How do I find out?!?!?!

pickles110564

noseymum wrote: »

My landlord is vague about his finances

You dont want to know much? As a LL i would never tell my tenants about my level of finances,what right have you to know these facts anyway.

noseymum

in reply to "pickles",
my landlord has volunteered to me the details of the financial state of affairs of this property (believe me I think I would have been better in some ways not knowing my predicament!)
He seemed to feel I had the right to know how skint he was so I could over the 17 years;
-replace fencing
-pay for roofing repairs
-install a new bathroom to replace the old damaged one etc,etc

jamesd

If you can afford it, offer to do a "below market value" purchase of the property from your landlord, just the way some landlords use to get property cheaply. Very cheeky but it may solve the landlord's problem. Or just a normal price purchase.

If it's a BTL mortgage the lender can appoint a receiver to act as an agent of your landlord (even against the landlord's wishes) and the receiver can both collect your rent and sell the property, but these are AST rules and you are probably not in that particular type of tenancy. If you do have a tenancy that is hard to terminate that could significantly reduce the value of the property on the open market. Sale wouldn't automatically end your tenancy and it's possible that the buyer would want you to continue as a tenant - that's what happened to me.

It's likely that your landlord will be able to remortgage the property.

dunstonh

Lenders ceased requiring to know about repayment vehicles many years ago. So, he could have surrendered his endowment without letting the lender know.

Virtually all buy to lets done today with borrowing are on interest only mortgages with no repayment vehicle.

noseymum

Thank you to anyone who has replied to this thread.
I have an appointment next week with a solicitor and will have a better idea of my situation then.
Ta.

EdInvestor

noseymum wrote: »

Thank you to anyone who has replied to this thread.
I have an appointment next week with a solicitor and will have a better idea of my situation then.
Ta.

Application to the council/housing associations for rehousing might also be a good idea.

kennyboy66_2

noseymum wrote: »

Hi there,
I'm an "assured long term tenant" and my rental payments have been paying my landlords "Interest only Mortgage" for 17 years.
In September 2008 (this time next year) the interest only part of the mortgage finishes and the amount borrowed is due to be paid.
The landlord has told me that he had an endowment policy originally but that he let it lapse years ago as he couldnt afford the payments!
Is that possible? Isnt he under some sort of obligation to pay them?
If this is true does it mean that the mortgage lender will re-possess the property and evict me and my 2 children?
I have never been in debt or missed my rent payments in all of the 17 years I have been a tenant.

Please see the Shelter website for your rights under an assured tenancy

http://england.shelter.org.uk/advice/advice-8112.cfm#wipLive-29805-5

There is no way you should be paying for repairs.

You also hold strong rights to prevent eviction.

He is almost certainly calling your bluff and trying to stiff you. I would fight this all the way - he is hardly likely to want the property to be repossesed even if the lender could do this (they may not have the gounds to) as he will getting less for the property in the event of repossesion than in the event of a sale with no tennant.

You have a couple of options;

1) Offer to buy the property at below market value. Perhaps ask estate agents what similar properties sell for with sitting tenants

2) Stay in the property and force his hand. He more than likely will just take another interest only mortgage out paying roughly £280 a month - I would imagine your rent covers this.

3) Investigate what housing association properties are avaiable and IF AND ONLY IF they are, offer to give up your tenancy for a price. I don't know what this could be - but potentially could be anywhere from £10k - £40k, but would have implications on any benefits you might currently get.


Keep making your rent payments on time as usual.

I would also post this on the House Buying / Renting forum as you will get some good advice there.

WTF?_2

noseymum wrote: »

Thanks for your reply,
the amount owing is 55,000 approx and the property is now worth about 150,000 -180,000 approx.
My landlord is vague about his finances,at best.
I have had to do all my own repairs to the property in the 17 years as he always pleads poverty when I try and get anything done.
I have tried to find out more info on "Shelters" site.
Apparently the lender can evict me to recoupe the money from my landlord.
Is he calling my bluff to get me to leave the property so he doesnt have to sell it with a "sitting tenant"?
How do I find out?!?!?!

Why do you need to know about his finances at all?

All you need to know is how much rent he expects you to pay per month, and what the terms of your tenancy are.

If you've been paying him rent for 17 years (!!) and personally footing the costs of all repairs to the property (!!!!!!) I can only assume that the landlord has realised that you are extremely gullible and has been playing you like a fiddle.

And if he told you from the start, 17 years ago, your rent was exactly covering his mortgage, why on earth didn't you buy a similar property and use the money to pay your own mortgage!