Is voluntary surrender an option?

[Deleted User]

OP, are you in Scotland as your user name might suggest? If so there is no minimum term or fixed term for tenancies that's started from 1st December 2017 onwards.

[Deleted User]

yksi wrote: »

If you decide to keep it, change agents. The agent you're with seems to be choosing rubbish tenants - is it possible they aren't credit checking applicants? And get someone who'll require 12 month leases, plus you can specify the types of tenants you don't want - yes, discrimination is allowed so long as nobody puts it into writing or tells the unsuccessful applicants.

What calibre of tenant do you expect is renting properties valued at £40k to £50k in an area where house prices fell during the 2008 recession and still haven't recovered?

yksi

Lover_of_Lycra wrote: »

What calibre of tenant do you expect is renting properties valued at £40k to £50k in an area where house prices fell during the 2008 recession and still haven't recovered?

I'd personally still prefer not to have tenants who'd only recently arrived from overseas, tenants without a job and tenants with pets. Working people do exist in lower priced areas.

foxy-stoat

I would sell it now and try and finance the shortfall using equity in your current property, or some other way.

How many years left on the interest only mortgage and do you expect the flat to be worth more when the mortgage is due to be paid in full?

You will have to sell it anyway, unless you had a repayment vehicle when you took out the IOM.

silvercar

Difficult situation because selling up just crystallises your losses. Keep on going and you could eventually see a time when the property is worth what you paid.

Getting better tenants is one solution. Decent hard working people on low incomes do want to rent, as to those on higher incomes saving for deposits to buy. Change agents and get a better tenant. Alternatively, find out whether the LHA in your area would cover the rent and find a decent single parent who wants to make the property her/his home for a long time.

seradane

silvercar wrote: »

Difficult situation because selling up just crystallises your losses. Keep on going and you could eventually see a time when the property is worth what you paid.

But selling up could also stem further losses... (sunk cost fallacy and all that...)

babyblade41

Agree with silvercar above.

You need to carry on and make a determined effort to get it rented to a suitable tenant. Not sure about your LHA but ours will take over and cover rent for a tenant and be responsible for that tenant.

If you sell at a loss you are still liable for the shortfall so my advice is see if you can come to some arrangement with the mortgage company for some breathing spavce and get the property rented .

Does it need some freshening up to make it more appealing, I would imagine a good weekend cleaning and re-painting might work wonders

Scotsgirl74

I paint it every time it is rented out. The flat is in a decent area and was rented to a working couple with children. House prices in Scotland are lower. I have 14 years left on the mortgage. I do have equity I my current home but I don’t have a good credit rating. I really don’t want to rent it out any more. It cost me money every month to do so which means I’m out of pocket each month. I’m going to give mortgage company a call. Last resort will be handing the keys back. Renting it out again is not an option for me any more

babyblade41

Scotsgirl74 wrote: »

I paint it every time it is rented out. The flat is in a decent area and was rented to a working couple with children. House prices in Scotland are lower. I have 14 years left on the mortgage. I do have equity I my current home but I don’t have a good credit rating. I really don’t want to rent it out any more. It cost me money every month to do so which means I’m out of pocket each month. I’m going to give mortgage company a call. Last resort will be handing the keys back. Renting it out again is not an option for me any more

It does sound you have made up your mind ... I was a landlord for many years without mortgages and it was still a tough time on occasions.
Your Mortgage company will give you the right information and best way forward , but you will still owe the full amount whatever you sell the property for ..it won't be just wiped off.

You may have to think about a re-mortgage on your own property to cover the short fall

Scotsgirl74

I think I’ve definitely made my mind up. Going to call mortgage company after work. I know there will be a shortfall. I’m hoping there would be some arrangement we could come to without affecting my current home. Equity from my isn’t an option due to me credit rating which is a shame as we have a low mortgage and a lot of equity