Stuck in the help to buy trap.

SophieHull

So I've posted here before and still stuck. My question is, "when help to buy say they can give consent to let temporarily, how long is that"? 

Thrugelmir

See there's a lot of previous history on the same topic. Whose names is in the mortgage in? 

Thrugelmir

Then voluntary repossession maybe an exit route. Short term pain for long term gain. With your ex still jointly and severally liable for any shortfall. You are between a rock and a hard place.  If your ex has assets then HTB ( and possibly the main mortgage lender as well) has an avenue to recover the money. 

GDB2222

The obvious thing to do is to reduce the price of the flat, so it sells? What's wrong with that? So, HTB say "But, our surveyor says it's worth £75k", and you reply that the best offer you can get is £65k, say. At some point, their surveyor has to accept that his estimate is just that, an estimate. If you test the market and prove what the market value is ....? 

Do you have a link to the property listing?

Mizydoscape

Hey Sophie, if it gives you a glimmer of hope:

We ended up with 3 different valuation surveys of our help to buy flat each one decreasing in value until we reached a value we could realistically sell the flat at. We started at 135k and marketed for a few months with no interest. When the survey expired we then had a new one and the surveyor agreed to drop to 125k. We eventually got an offer at 120k but by that time the second survey had expired. We spoke to our surveyor who agreed that was a fair price for the flat and he created a new report for 120k. Before the third survey I put together an email for the surveyor with links to recently sold, comparable properties in the area and set out the reasons I felt the lower value was correct.

Target had to send our survey over to Homes England to verify as the flat had lost more than 10% of its value since purchase but they did accept and we completed just over a month ago.

GDB2222

I think that renting the flat out is just kicking the can down the road, to some extent. Is there any real hope that the value will increase in say one or two years? Otherwise, are you planning to be landlords for years and years?  

There's a 1 bed house up for rent at £425 pcm nearby. I assume that your flat above a bar would go for less. Is letting really a viable proposition, anyway? 

I notice lots of really nice furniture in the current sale listing. Are you proposing to leave that there for a letting? 

Mizydoscape

SophieHull said:

Mizydoscape said:

Hey Sophie, if it gives you a glimmer of hope:

We ended up with 3 different valuation surveys of our help to buy flat each one decreasing in value until we reached a value we could realistically sell the flat at. We started at 135k and marketed for a few months with no interest. When the survey expired we then had a new one and the surveyor agreed to drop to 125k. We eventually got an offer at 120k but by that time the second survey had expired. We spoke to our surveyor who agreed that was a fair price for the flat and he created a new report for 120k. Before the third survey I put together an email for the surveyor with links to recently sold, comparable properties in the area and set out the reasons I felt the lower value was correct.

Target had to send our survey over to Homes England to verify as the flat had lost more than 10% of its value since purchase but they did accept and we completed just over a month ago.

I feel your pain we just aren't in a great position to take such a hit though. Did you simply pay them off and keep the flat? Our struggle isn't necessarily the acceptance, it's the sheer amount of time they took. 14 months is just crazy. Like if they just said no to begin with we could have accepted that as I said 50k was a silly valuation.
The other issue is there aren't really any comparable properties. We contested to them that their survey compared our flat to other properties that could easily be mortgaged, and one of those properties was only 70k yet ours is worth 75? It's been 3 years now and has absolutely drained us, putting us in and out of depressive states. 

It was a 50% share so we sold at 120k and paid HTB 60k.GDB2222 said:

I think that renting the flat out is just kicking the can down the road, to some extent. Is there any real hope that the value will increase in say one or two years? Otherwise, are you planning to be landlords for years and years?  

There's a 1 bed house up for rent at £425 pcm nearby. I assume that your flat above a bar would go for less. Is letting really a viable proposition, anyway? 

I notice lots of really nice furniture in the current sale listing. Are you proposing to leave that there for a letting? 

Agree with this. Even if you are allowed to rent the flat, would you want to? What if something breaks and needs replacing? Will the rent cover your costs?

SophieHull

GDB2222 said:

I think that renting the flat out is just kicking the can down the road, to some extent. Is there any real hope that the value will increase in say one or two years? Otherwise, are you planning to be landlords for years and years?  

There's a 1 bed house up for rent at £425 pcm nearby. I assume that your flat above a bar would go for less. Is letting really a viable proposition, anyway? 

I notice lots of really nice furniture in the current sale listing. Are you proposing to leave that there for a letting? 

Strangely, we've asked several agents on the rental value and they all say around the £500 pcm Mark. I know at one point the one next door was £450 pcm and the current tenants there have had a look in ours and say they wanted ours when they were looking and we're upset to find it was actually the one they got. Not sure how they would think they were getting ours since it's not up for rent but that's just something I noted the guy said.
I'm answer to your other question, yes. We would rent it out through the temporary basis until we can pay off help to buy. We've estimated no more than a year to save (living with parents so cheap rent, not ideal, but needs must). Once we've removed the ball and chain we will have enough equity to change to a buy to let mortgage, or if we feel it is self sustaining enough leave it as it is so that it will just get paid off over time. Then we have something to sell if things go south, or a pension boost, even if we have to sell it cheapish. 

SophieHull

GDB2222 said:

I think that renting the flat out is just kicking the can down the road, to some extent. Is there any real hope that the value will increase in say one or two years? Otherwise, are you planning to be landlords for years and years?  

There's a 1 bed house up for rent at £425 pcm nearby. I assume that your flat above a bar would go for less. Is letting really a viable proposition, anyway? 

I notice lots of really nice furniture in the current sale listing. Are you proposing to leave that there for a letting? 

Another thing I should note is that we simply don't want to live there. So renting it out is just a way out. If we did get £500pcm it would be self sustaining, breaking even with a little but extra for repairs if needed. The important thing is we won't live there anymore. We want a family and whilst it's not ideal living with parents, my parents have a 4 bedroom house so we have a living room, bedroom and spare bedroom for a child, and an in house babysitter. 

GDB2222

If you let it with that furniture in, the furniture will get wrecked. Are you okay with that?

If you can let at £500 a month, you should get around £3k a year after expenses. I guess that would cover the interest on the mortgage? 

SophieHull

GDB2222 said:

If you let it with that furniture in, the furniture will get wrecked. Are you okay with that?

If you can let at £500 a month, you should get around £3k a year after expenses. I guess that would cover the interest on the mortgage? 

There would no furniture in it. We would take everything. The mortgage would be about £250 that includes interest and principle. The consent to let is still a residential mortgage but with +1% interest. There would be no tax to pay until my husband is on the mortgage.