My partner and I bought a property to let out a few years ago, and while we have had tenants in the property, they began to fall into arrears with the rent, and eventually we had to go through the process of having them evicted. When we finally got the property back it was ruined. The carpets were so filthy they need to be replaced, holes in the walls, fixtures removed, it will cost us over £10,000 to bring the property back to a state to let it out.

We do not have the money to do this. In addition, hard to believe in these times, but the value of the property has decreased. We owe £80,000 on the mortgage, but due to the neighbourhood, and the state of the property, it would be lucky to sell for £50,000.

We are considering walking away and letting the mortgage company repossess the flat.

My question is, what happens if we do walk away?

Thanks in advance,




I understand your situation and position, and can try to explain what may happen should you decide to give the keys back to the mortgage lender. Also sorry to hear you had such bad tenants.

Losses on property that has depreciated or gone down in value, is not realised until you sell the property or asset; meaning currently your loss is only on paper.

If you cannot afford the repairs, you can still try to sell the property for what you owe, or continue paying the mortgage if you can afford to do so, until the market values go back up. Obviously without tenants and the rent, this can prove difficult.

Should you give the keys back or allow the lender to repossess the property, any shortfall from the repossession and sale, will become an unsecured debt that you will owe, can make payments on, and be chased for payments.

This means if you have other assets, such as your own home, they could be in jeopardy if you were made bankrupt, or a CCJ and subsequent Charging Order was issued.

It can get a bit more complicated, but this is an overview of what could occur.

Is there a possibility of a re-mortgage to access any equity you have in the property to complete the repairs, and re-let the property? Or possibly getting a loan to do the repairs?

Yes, that puts you further in debt, but if you can let the property until the values increase and then sell it, it saves the repossession and loss.

A lot to think about, I know.



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