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My property values is decreasing but the rent is the same

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CountrysideProp

New Member
Hi
I bought a property 3 years ago on help to buy and now has come the time to sell. It is an apartment and full due to it having cladding and also the kind of folk who have been put into the block by the council the price of the flat has decreased. However the rent is stable and not much different from other properties which are selling for maybe 50k more then my flat.
My question is, if I want to move from HTB mortgage on to a Buy to let, what are my options?

I have no savings nor any equity in the property as it’s value is decreasing at the rate I am paying off the mortgage.
 
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PostBrexitInvestor

Member
It would be useful if you could let us know the value of your property and the net rental income. Have you paid down any of your help to buy mortgage? Also, if the cladding is “illegal” do you have any recourse to the previous owner?
 
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CountrysideProp

New Member
The property is now worth around 150k and even at that price I haven’t had a viewing and it’s been on the market 2 weeks now.

It would rent out for around £850-900 pcm
I haven’t paid any of the help to buy part yet as it hasn’t been 5 years just yet,

I bought new so there wasn’t a previous owner, the cladding isn’t illegal but most lenders won’t lend because of it now. So seems our only option is to sell to a cash buyer.
 
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FWL

Member
This all seems very fair because if the cladding is not illegal then you would have thought mortgage lenders would be happy to lend funds. The rental yield is a healthy 7.2% gross which more than covers finance costs. At that kind of rate are you not tempted to hold and collect the rental income?
 
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CountrysideProp

New Member
Yes, I don’t exactly know the reasoning behind the lending, however I do know it’s very difficult as our estate agent is now recommending we sell at auction as we would need a cash buyer. I think the cladding needs a recent safety test and the one it currently has is pre grenfell.

I would love to keep hold of it and rent it out, however it is on HTB so it would be against the terms of our agreement with them and also I am unable to buy elsewhere (with my partner) whilst being on a HTB mortgage which in the future I am hoping to do
 
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