Asset rich, cash poor - options needed

[Gertiefromnumber30]

We've been trying to sell our old flat for some months now, but flats are having a tough time selling in our area. We've reduced the price so it's now priced very keenly, but realistically are still looking at some months until a sale goes through, especially now we're going into August.

I'm quite newly self-employed having not worked for a while, and DH has become too ill to work. We've been living off a combination of my earnings and savings, but savings have dwindled to the point we need to get some finance to tide us over until the flat sells.

Despite having a lot of equity in the flat, which is mortgage free, we're coming up against so many roadblocks to getting a loan, because we can't show income - my earnings are lower than outgoings and are from self-employment.

What can we do? We can't get an unsecured or secured loan because of low income. Ditto a mortgage.

Options seem to be either a bridging loan - but these are very expensive and most seem to still want to see proof of income and have an end date that makes me uncomfortable. Or equity release - as DH is 60. Some lenders seem to still want to see income though, even though the LTV would be around 90% and I thought the whole point of these loans was for people to supplement income!

Hopefully the loan would only be for a few months and then we'd pay it off as soon as the sale went through, so either option would work out expensive in charges, but we'd be willing to swallow that to tide us over now. I'm looking for employed work too, but this could take time and still not pay enough to cover all expenses.

It's such a headache. Seems absolute madness we have all this money tied up but can't access it because of numerous hoops and obstacles.

Any ideas?

Thanks for that. It would usually be an option but I think we’d be hamstrung again because of the lack of income.

The flat needs refurbishment including a new boiler and we don’t have thousands to do it. And we can’t borrow because of no income. It’s all very circular. As DH is at retirement age and now in poor health we don’t want to be renting out the flat for the next few years in any case. We just want to sell.

No, because it doesn’t have a working boiler and also we’d need to vary the lease with the freeholder and he’s want to charge us £££ for that, if he allowed it at all. Plus it’s too much hassle to get it up to spec and then keep cleaning it after guests etc.

Thanks, I don’t think we can get this because of the issue with income.

Fantastic! So the economic downturn causing us problems through no fault of our own gets compounded with this. Yet another way we’re getting hammered.

Airbnb . You'll find transient builders who need a bed Monday to Friday in London. They're just looking for somewhere to stay

I think it's fine to sell, being a landlord can be a pain in the arse.

Can you put the flat up for auction?

In the current economic climate you have to be realistic about the value. All property will sell if the price is right and unfortunately you need to sell sooner rather than later so may need to drop the price to do so.

The alternative is waiting until a buyer willing to pay more comes along, but that also incurs (financial and mental load) costs if you need to borrow to cover your living costs.

But on the matter of equity release is there anything useful here?

www.moneysavingexpert.com/mortgages/equity-release/

Auction is a good idea and you can set a reserve price to avoid the price going too low.
Your DH needs to look into non means tested benefits such as contribution based esa and pip before he hits official retirement age as the benefits for disabled pensioners are scandalously low.

Ask a property manager to give you a rental appraisal on your own home. Then apply for finance based on this potential income, with the ''intention'' of moving into the flat... and then don't move.

Thank-you. Do you mean a buy to let mortgage? Or another loan? For loans, even the ones that are billed as ‘self-certification’ are anything but, as they still want to see bank statements etc. Does anyone loan on the basis of future income?

Have you looked at selling your flat via auction ?

You can set a minimum price to sell it

Tbh I think your only option is an auction , it doesn't seem like you have the funds to get the flat into rentable / sellable condition given it's no working boiler and sounds like issues with the lease which could be thousands . You may have to cut your losses .

We hadn’t considered auction. My perception was that properties would go at a substantial discount, and if so, we might just as well drop the price enough with the estate agent to shift it quickly. But I will look into it, thank-you.

There are no lease issues, it has a long lease of well over a hundred years. It would just need a variation for air B and B, which is standard. It wouldn’t even be that much in the scheme of things, it’s just we can’t afford to do it right now because of our circumstances with sickness.

If your DH is too sick to work, he should be claiming unemployment benefit or sickness benefit. Thus will also pay his National Insurance contributions towards his state pension

Look under www.gov.uk
Universal credit

Each individual needs 35 qualifying years of National Insurance contributions to receive a full state pension. His state pension age must be 67 ?

As others have said, there is a cgt liability whether or not you rent it out.

OP
I have a couple of similarities in terms of being freelance and having tried raise money against my current property, I was amazed at the response. If
i had a job where I could give notice any minute, it would be fine!

It just didn't work. In fact, after speaking to a lot of people, it seems like bridging loans aren't available to freelancers at all.

I'm not clear why equity release isn't an option for you though.

agree with pp who said to try and do a mortgage against your property that you live in.

Could you go to full time employment for a while, to tide you over?

Your employment isn’t paying the bills, so you’ll need to find employment that does, even for a few months until the flat is sold.

This thread has got me thinking too

MOMA has advantages for you over a regular EA sale. Buyers have to pay a deposit and are more likely to commit.

Definitely consider putting it in an auction, you may be surprised at what it achieves. Money will be in your account within a month. I sold a flat a few years back and got just 5k less than I would've done on the open market, super quick and easy.

Otherwise, you could stick a BTL mortgage on it to release some equity do required works and let it out. Some BTL lenders don't have a minimum income requirement.

Please could you message me a RM link to the flat? Looking to buy a project.

Likewise, as PP have said, auction is your best bet. There are lots of reputable agents and auction options. It can feel scary as you go to prepare for sale but you are likely to get a better deal than from the on line 'we buy any house' operators.

There are many people with small scale property interests who would buy it? I have done this in the past and am looking to dip my toe in again. They / we are harder to find but I'd appreciate a DM as I am looking for a project!

Thank-you littlelandlord7 and LoveToWearADress.

Have PM’d you both and will look more into auction and BTL mortgage.

I've sent you a DM. I have a contact who might be able to help 🤞🏽