Unable to sell Leasehold Flat- what are my options

KatieEJ87

Hello 

I’m really hoping for some good advice 🤞🏼

We have been trying to sell our leasehold flat, which is tenated, on and off since 2021 with no luck (oversaturated market in the area, high service charge 3k PA). 

This time it has been on since April this year, with one offer but fell through. We are now on a race against time before our 2 yr fixed mortgage with consent to let ends in November to understand our options. This is currently our predicament 

• I understand that we will not be able to renew consent to let on new product with our existing mortgage lenders. 
• We have had to reduce the flat by 70k less than what we paid for it, as a result of what we have reduced it to the value to mortgage ratio means we do not qualify for buy to let mortgage (I think) 
• If we remortgaged for a residential mortgage with a new lender they wouldn’t give us consent to let 

We can’t move back to the property as our jobs and child’s school is in completely different part of the country (we ourselves are now renting).  we have tried quick buy company’s but it would financially cripple us with what they are quoting. 

Is there any way we can continue to rent it out until the market improves and we can look at selling it again?? 

Would appreciate any advice or guidance.  

lr1277

I am unclear on some things:

Is the (estimated) property value more than the current mortgage?

Say you are desperate to sell and reduce the price further would the property price be less than the mortgage value?

Are the tenants willing to move out should you complete on a sale? If not, are you selling to another landlord with tenants in-situ?

If yes  to the previous first question, are you sure the tenants will move out? Some tenants say yes then find they can't get a suitable property so do everything they can to stay in their current property. If the tenants dig their heels in, could take more than a year (depending on the backlogs in the courts) to get them out legally. I am not suggesting getting them out illegally as there will be consequences.

Don't count on the house prices going up soon. I am not saying they won't go up soon(ish) but don't count on it.

In my case, I bought a property in 2001. The price stayed about the same till about 2014 or maybe even 2015.

I put the property on the market in Nov 2017. Loads of viewings but my first offer was in Sep 2018. This was after I had substantially reduced the price 3 times. The first offer was £50k lower than my lowest price. Then many offers, each one higher than the previous one. Eventually got the lowest price I had advertised. Completed in Dec 2018.

Edited to add; I suppose I should ask how long left on the lease? If less than 90 years are you looking into extending the lease as that will make the property more desirable.

KatieEJ87

The property is on the market at 240k, the mortgage is 239k, Zoopla values it at 257k - so for this reason buy to let mortgage is not an option i belive. 

 If we reduced further then yes it would be less that what the remaining mortgage currently is 

The property has to be vacant to exchange unless sold to an investor so the tenants are being severed notice this week. 

The problem is as mentioned that we are in a race against time as our current mortgage product expires in November with consent to let. So if we haven’t sold the property by then what can we do? 

Hoenir

KatieEJ87 said:

The problem is as mentioned that we are in a race against time as our current mortgage product expires in November with consent to let. So if we haven’t sold the property by then what can we do? 

What options has your mortgage lender given you? 

lr1277

Have you considered a 100% buy to let mortgage?

I have never taken out such a mortgage but the internet suggests they are available to certain borrowers. You may need to apply through a broker.

And I suspect:

the interest rate will be MUCH higher than you are paying now

And either the rent will have to more than cover the agreed mortgage payment

and/or the income from the property owners should be able to cover the mortgage if there is no rental income, along with covering all their other costs.

I googled:

Uk 100% buy to let mortgage

propertyrental

With the benefit of hindsight, you should have evicted the tenants back in 2021. Tenanted properties put a lot of buyers off (quite understandably).

Serve notice. Wait till you have vacant possession, then re-advertise. Yes, it'll cost you in terms of rental income but you're not exactly in a good plsce right now......

KatieEJ87

The tenants will be out it 2 months now and it would take the same amount of time to complete anyway… 

it wasn’t tenated in 2021 we were living there and no one at all seemed to want a flat in the covid era, it didn’t have any interest. 

KatieEJ87

lr1277 said:

Have you considered a 100% buy to let mortgage?

I have never taken out such a mortgage but the internet suggests they are available to certain borrowers. You may need to apply through a broker.

And I suspect:

the interest rate will be MUCH higher than you are paying now

And either the rent will have to more than cover the agreed mortgage payment

and/or the income from the property owners should be able to cover the mortgage if there is no rental income, along with covering all their other costs.

I googled:

Uk 100% buy to let mortgage

Thank you I disnt know this was an option, we have an appointment with our broker next week to discuss options he hasn’t actually said this is a possibility yet but hopefully it is 

propertyrental

KatieEJ87 said:

The tenants will be out it 2 months now and it would take the same amount of time to complete anyway…

Fingers crossed for you.

powerful_Rogue

KatieEJ87 said:

The tenants will be out it 2 months now and it would take the same amount of time to complete anyway… 

it wasn’t tenated in 2021 we were living there and no one at all seemed to want a flat in the covid era, it didn’t have any interest. 

Don't want to be the bearer of bad news, but that's best case scenerio. Worst case they are still in the property in 12+ months time. Then anything in the middle.

silvercar

What actually happens in November is, not a lot.
 

Your lender may remind you that your CTL ends, they may offer to renew it. You move to the lenders SVR., which will no doubt be higher than you are paying now. You may be able to go on to another fixed deal with the lender. Easier to do this online if you can to avoid too many questions. If your lender writes to you and asks your current situation you tell them the property is on the market and you are in the process of removing the tenants.