Repossession Advice for Buy to lets in Scolland

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  • Repossession Advice for Buy to lets in Scolland

    Hello all, I need some urgent advice. Essentially I am going to have a severe problem that I need advice on. I have 2 Buy to let properties in Scotland that I have had 10 years with 2 great long term tenants in them.
    However, the mortgage rate has gone up to 5% so the monthly cost of both is over £3000 pm and I get €1500 in rent for both so massive monthly shortfall I cannot afford. Moreover both properties together are worth £320,000 , and the mortgages are £625,000 so I can’t sell or re mortgage due to this huge negative equity so I am trapped. As of today I have not missed a payment but will be next month.
    I have spoken to CCCS and Business debt line and I need some specialist advice as the properties are in Scotland and I live in England. I have exhausted all the advice lines recommended by money advice Scotland.
    I want to know:
    1. Should I try to sell them myself ( will cost me £2000 up front with the new compulsory Scottish Home Report and marketing fees )
    2. Allow lender to repossess?
    3. Should I hand back the keys?
    4. I am not sure if implications of these are different
    Any of these will still however leave a £300,000 ish shortfall. Can the lender then pursue me in England? Can they make me bankrupt?
    I really need some advice but do not know where to go. It is complicated bu the fact I live in England and the properties are in Scotland.
    Please can you keep this info confidential , apart from your experts.

  • #2
    May be reading this wrong but the rent you appear to be achieving appears substantially inadequate and the question that arises is why has the rent not been substantially raised to at least the 5% level, and can it be raised now.

    Second question the lender almost certainly will repossess property and pursue you for the shortfall if you do not pay mortgage, only a matter of time, fact you live in another jurisdiction is irrelevant you are still responsible.

    On saying that you can not get blood out of a stone.


    • #3
      To add to post not sure how you can sell property as they are in substantial negative equity and no one in right mind would pay enough to discharge existing mtg.

      You could speak to lender and ask them if they would accept less or sell now as mortgagee at price you accepted, they may however be reluctant and want to repossess and do their own marketing to test market price.

      Not sure why this is only now a problem if you have been renting for 10 years, have you been capital raising to buy more BTLs and if so do you have equity in any other properties.

      This forum is public not private and anyone can read it so ensure you do not reveal anything that could identify you when replying.

      Not sure if lender would want to bankrupt you as not sure what is in it for them..


      • #4
        i am getting the going rate for the rents, the max I can, and as i said i have great long term tenants so impossible to increase the rental income. The problem was i was on a very low base rate tracker and when that ended the monthly mortgage payment went up to 5 X its original level!!!, hence the massive monthly shortfall now. I am with the TMB who are closed to new business so there is no product I can switch on to as they don;t have any, other than their high svr, and as I said i cant remortgage away, so I am stuck.
        I need a good scottish legal adviser who specialises in this sort of stuff. Any ideas?


        • #5
          Alex, just seen you second post- thanks.
          I bought a site with lots of BLT landlords through Inside track. The properties were off plan and apparently below market value. They are in Glasgow and the TMB actually valued at more than the purchase price on completion, BUT prices soon went down dramatically and have not recovered.

          I do have 2 other BTLs in england that are fine- i.e. rent covers mortgage, but not much equity , maybe 20-30000 between them.


          • #6
            Is there anyone else who has or has had a mortgage with TMB ( The mortgage Business), and is stuck with them , or been thru repossession, or sold and has a massive shortfall left?
            i want to find how how they deal with this.
            As there were a specialist BTL lender, and now only have a 5% svr and are closed to new business, i bet there are loads of you in the same boat as me???? Any help greatly appreciated.


            • #7
              Did you get a professional valuation of the property or rent achievable in the 1st instance, and did you own any other btl properties at the time.


              • #8
                yes the TMB valued and the proposed rents were much higher than actually achievable.
                These were the first BTLs i did. In fact the plan wasn't to let initially but to sell immediately as there were valued higher than purchase price and so say had a 15% discount negotiated by inside track, but all this proved false and they quickly fell in value. There were and are a lot of 2 bed apartments like these in Glasgow so massive oversupply. That said the problem is not so much the rents but the high mortgage monthly cost and the massive negative equity. i would like to get rid!!


                • #9
                  Another "below market price" that wasn't! So sorry but...

                  Suggest you declare yourself bankrupt & start again.

                  Pursuing debts into England is easy: I've done it for ex-tenants.. They'll find you. There's even a company specialising in it.
                  I am legally unqualified: If you need to rely on advice check it with a suitable authority - eg a solicitor specialising in landlord/tenant law...


                  • #10
                    Agree with artful dodger, as a side point a class action was going ahead against outfit that were promoting alleged BMV scheme, google this for more details and also see if they are suing surveyors for negligent valuation and estimate of rent, not sure if you relied on basic valuation carried out for lenders or commissioned your own.

                    If the former a recent case harder to prove they owed you a duty of care, a recent case does not assist, if latter no doubt they did.

                    I think you need advice from solicitor who will take your case on in a no win no fee basis. Speak to law society of Scotland for name of specialist firm or class action firm mentioned above.

                    Worrying I notice a few more get rich schemes are starting to spring up,


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