Unable to find tenants or pay mortgage – advice requested please

by Readers Question

12:26 PM, 18th February 2014
About 7 years ago

Unable to find tenants or pay mortgage – advice requested please

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Unable to find tenants or pay mortgage – advice requested please

I have two properties in the North East of England both in serious negative equity, and on interest only mortgages. The vehicle that was in place to pay these off (within the next 4 years) has collapsed and I have no way now of paying the mortgages off.

One is rented with tenants who have just started paying less than is due about 2 months ago. The other has proved difficult to rent and has been empty for 6 months. I now cannot pay the mortgages on either, and am facing repossession.

What should I do? The mortgage company has told me that they cannot offer anything other than someone to give me advice on how to rearrange my own personal finances so that I can keep paying something. I’ve already examined this myself and there is no flexibility here.

I can’t sell them myself as the negative equity is so high I wouldn’t be able to pay the balance off. I have no other assets. I am assuming repossession will happen, is it best to contact the mortgage company and tell them this is the only option? Or what?

I realise I will end up owing them even more after they have gone through the repossession route, but I don’t see any other option. I won’t be able to pay that off either.

Please help



Roger Lancaster

10:26 AM, 19th February 2014
About 7 years ago

Have you looked at Rent Now Buy Later schemes where a tenant pays rent, an additional sum to build up a 10% deposit over 5 years and does all the maintenance in exchange for an agreement to buy the property at a price agreed to day which could be in excess of your current mortgage. If they default they lose the fund being built up towards their deposit to you so they have every incentive to look after the property and not default on the rent. We have several of our 'Dogs' on such schemes which over the 5 years generate significant cash sums which would not otherwise be the case. Let me know if this appeals and we can talk more.
Don't give up without exploring all the avenues. There is some excellent advice above but you do need to plan and the ACT to get yourself out of this. To many people stick their head in the sand when solutions are available or give up without trying.

11:45 AM, 20th February 2014
About 7 years ago


Have you heard from this lady at all?

I do hope she has been able to read all the advice that people have shared.

There are things she can do to help resolve this problem, but she needs to take strong action as soon as possible imho.

If you ignore problems in property, they tend to escalate. Best to suck it up and try and take control of a situation ... or "decide forwards" rather than hanging in limbo!

Mark Alexander

22:18 PM, 20th February 2014
About 7 years ago

10:25 AM, 21st February 2014
About 7 years ago

I think this thread highlights the importance of getting the correct advice.

Many people with a huge problem don't fully investigate the options and it could mean the difference between financial life and death.

I do hope this lady is reading the thread and taking control of her situation, as I believe it can be solved and her properties got back on track.

Sam Tevfik

14:15 PM, 24th April 2014
About 7 years ago

The tennets that are not paying the full amount, really you need to open the discussion with them straight away as to why they are not paying the full amount, and form an immediate action plan to gain the payment that they are short falling upon.

Someone suggested a section 8 to get them out of the property. If they are out of the compulsory six month statutory. However i would suggest a section 21, as it is more straight forward and the eviction process cannot be argued if otherwise.

The empty property may need renovation or fixing in order to rent or just a general tidy up. ( this can possibly be ignore, if very low on funds.)

An alternative would be to Sale the empty property. We can put the property on the market e.g. right move. Where we can gain tennet buyer, so that they thus pay deposit
and makes monthly payments over and above the monthly rent. Thus they are giving you payments to make the purchase of the property. If they decide to opt out then you can negotiate what is the fair position to it for the both of you.

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