To feel so down about this

[Bigfishlittlefishcardboardbox39]

Long story short we bought a property 8 years ago that was over inflated (in hindsight a terrible decision) and now we’re looking at negative equity.
It’s too small for us and when we eventually move out we will be moving in with in-laws to save.
we don’t come from money nor do we have outstandingly well paid jobs, we make enough to get buy but we pretty much live pay cheque to pay cheque.
Our whole social circle has lovely houses, regularly spend money on home improvements and talk about things ie how much things cost (not in a crass way) like it’s nothing. We need a new bath and have been quoted 1k and I don’t even know how we’re going to afford it.
I work PT and my DH FT. His job is particularly labour intensive and long long days. Our mortgage and rent alone is 1800 a month on a 2 bed 1 bath flat (not in London or a particularly sought after location)
We have the gift of health which I know is worth way more than anything material but I can’t help but feel down when I think about my situation. I was with a lovely group of friends today who all have lovely homes and space and a garden etc, then there’s us. We both work so hard and it’s just feels relentless!

Why are you paying a mortgage and rent?

How much did you pay for a 2 bed flat out of London for your mortgage to be 1800?! My 2 bed in London doesn’t even cost that.

Will living with your in-laws actually give you any more space?

Why are you paying rent and a mortgage? Baths don't cost a grand so you don't need to spend that much. Your mortgage seems really high - have you spoken to a broker to see what you can do about that?

Are you paying both rent and mortgage because it’s shared ownership?

Shared ownership
8% variable mortgage
and I have spoken to half a dozen brokers. If we fix, due to negative equity we will save £100 pm. But then we can’t sell as we’ll have to pay early exit fee.

Mortgage and rent?

Can you work full time?

I work 4 days, I am currently not able to do another day.

How much negative equity do you have? You won’t be able to sell unless you can pay the difference anyway, so I’d take the fix and save the £100 a month to put into the mortgage. How many DC do you have? A 2 bed is fine until they are teenagers.

It is a very small 2 bed flat, we could stay but we’d be paying 1700 for something that’ll never make us money.

I'd also fix. Either it's minimal negative equity and so doesn't make a huge amount of difference in which just sell immediately and don't stress about it, or it's enough that it impacts your next purchase in which case fix on a low rate and ride it out.

We won’t get a low rate though that’s the thing. Our valuation puts us in negative equity and despite speaking to multiple brokers the best deal we have been offered is 7% due to LTV rate.

Ahh I see what you mean, sorry. It does sound like you're just going to have to take the hit and sell. On the plus side, even if you end up renting you'll still be saving a tonne compared to what your paying now in most parts of the country.

I’d just stay put (I wouldn’t come off the property ladder and you won’t always be in negative equity) and try to get another quote for the bath. Do you have a shower you can use in the meantime?

This isn’t completely abnormal, many people live like this and owning property is expensive at times. I currently have a whole shower room that is unusable, I can’t afford to repair/refurbish it at the moment so I’ve just shut the door on it and try not to think about it (it was only built a few years ago). And I’m in my 50’s and should be able to afford to repair stuff but that just isn't possible at the moment as I am now single so only my income.

Focus on the things you can control and definitely stop comparing yourself to other people, what they do or have is not important, it’s not a competition.

Surely the 2 bed flat is still better than living in a bedroom in your in-laws home?

How much is the exit fee though? It's £199 with my bank. Not really something I would consider a deal breaker.

Stop comparing your home life to others. They could be up to their eyeballs in debt.

Early exit fee is 8k in first year I think and 4k in second, so not viable.

The thing is, I’m not just comparing my life to a couple of people, it’s literally every single person we know. It’s so frustrating when we both work really hard.

and yes, living with in-laws would be better. Our current property, the kitchen has one side, I can’t even dish up 4 plates that’s how small it is. Even estate agents have commented on how tiny it is.

Sorry if I’ve mis-understood but if you sell and move to another property then you can port your mortgage and not pay an early exit fee. Or are you planning on moving in with your in laws regardless?

Could you rent your flat out and move in with in-laws? If rent would cover most of mortgage? Not sure if that’s allowed in shared ownership properties?

It's not. You can only rent a room while living there. Not that people don't let the flats anyway but, technically, you could have it repossessed by the housing association.

OP, I get that the situation is frustrating but the property is not meant to "make you money". It's meant to be a safe place for your family and a secure roof over your head. The property prices go up and down all the time and I would be inclined to sit tight and build up equity. Sod everyone's nice house.
We had three generations living under one roof in my granny's three bed flat. It was a tight squeeze but it was our home. They had it since 1965 and nobody could really give a toss how much money they could theoretically make out of it. I feel like housing wouldn't be such an issue if people bought houses and lived in them rather than worry about profit their home is making them.

Does your existing lender not automatically offer a rate without going through valuations etc? My last two renewals I just logged into my account and selected a rate.

Glad I jumped on this thread. Something I know about.

Homes England has recently updated its guidance around the RICS valuation. If you need to sell you shouldn't have to accept all the risk and the housing association none (which means you shouldn't be in negative equity for a small share).

Seek a dedicated independent solicitor who deals primarily in SO for guidance and make sure they are not appointed by your HA or get any kickbacks or referrals from them

Thank you for this. I’m not familiar with this updated guidance and not sure I fully understand (it may because it’s late!) you say small share but we have the largest share you can get I think (75%)

I do get it, and I know that it’s not all doom and gloom. But most people move from home to home a couple of times in their lives to suit their needs at that time, whether that’s upsizing or downsizing. The thing that frustrates me most is our outgoings are huge and we have very little, it’s a very small property. We get 10 hours of visitor hours a month, no garden, one window to allow natural light in, I could go on…

£1800 per month is extortionate. It’s all relative, if I lived in a small property I would expect to pay outgoings that reflect this.

Ah sorry I thought you had the 25 per cent share.

Can you manage to staircase up to the full 100 per cent? That will definitely be better for you in the London term. And if the value is low now is the best time to do that