help, what to do with mortgage?

logan5

ok situation is:


own a house that have been renting out and now want to sell. the house has been on the market for 9 months, which isn't unsual in this area. the tenant has now decided to move out and has bought there own place.


im now staring at an interest only mortgage that has gone from about £280 per month to £350 due to my fix ending in April and the bank of England increasing the interest rate. plus the council will want council tax at about £110 per month.


I can bare this cost short term but ideally want rid of the property and the mortgage. so I have a few questions:


1) can the local council really enforce full council tax on an empty property after 1 month free? I heard the gov were considering giving councils the power to do this, but mine seems to think they can do this now, and has done for at least 4-5 years. in the past it was 6 months free I think.


2) how can I minimise the mortgage cost each month? im not in any fix and wonder if, as the property isn't being let, I could change to a residential interest only mortgage via the same company without incurring to many charges? one which doesn't have early repayment charges due to me obviously selling it shortly.


3) do empty properties sell quicker?


p.s. house is worth £125k and mortgage is about £83k, I could use savings to get this down to £75k so would be able to get 60% LTV.


I await your advice.

Thrugelmir

Price the property to sell quickly. An empty property is going to cost you money. Better to cut your losses and get rid. If cashflow is going to be a problem. You don't want to default on the mortgage. As this will cause you far bigger problems personally.

PS. If you have £8k of savings. Then you should be able to manage your way out of the situation in 9 months.

logan5

yes I can cover it, but each month it drags on is essentially dead money.


im wondering how low to price the property without looking desperate. I initially had the property up for £129995 in Feb. since then ive dropped to the original valuation (by 2 agents) of £127500 in about May. then switched agents in July and about 10 days ago dropped it to £124950.


similar properties have sold for £125k as early as 2016. its like the bottom of the market has fallen out. it doesn't help that a new estate has been built near by where they are selling new 3 bed semi's for as little as 30% shared ownership. but when you work the figures out it means the think the house, which is smaller than mine, is worth £155k!!! but people are buying them.


p.s. this is in the east midlands where apparently house prices have risen about 5% each year.

csgohan4

people will only pay what a house is worth, not from a piece of paper/ website

dare to link your property for critiquing

MoneyGeoff

logan5 wrote: »

1) can the local council really enforce full council tax on an empty property

Yes they can. They can even charge 50% more if it's empty for a long time.

logan5 wrote: »

2) I could change to a residential interest only mortgage via the same company without incurring to many charges?

In theory yes but lenders prefer repayment mortgages these days. Worth asking though.

logan5 wrote: »

3) do empty properties sell quicker?

Yes it's a big selling point.

dimbo61

Have you had any viewings ? Any feedback ?
Does the property need money spending on it ?

getmore4less

Any students in the family you could move in?

Councils tax exempt

logan5

Had about 8-9 viewings. Varied feedback some don’t like the estate, although it’s a private non council quiet estate and we lived there 14 years, but some people are just a bit weird in my book. They would rather buy an old Victorian terraced house with damp and big repair bills. One EU buyer who said he liked it but wanted it in the middle of town, this is a common complaint from the EU buyers and I don’t know why the agent doesn’t explain where the property is before they book. Oh and I did have one offer months ago of £120k but I countered that the other properties were selling for £125k as far back as 2016. They didn’t increase the offer so assume they bought elsewhere.