thanks for joining in tt lady.

Negative equity may have been slightly out as he (they?) still owe approx £114k and it was recently valued at £92k but for a quick sale they could probably only get £89 / £90k. They did buy at the height of the boom and one-bed flats have probably faired worse than most, so may really be nearer to £15k in NE.

He doesnt earn enough on his own to officially take on the mortgage and she seems to think there is some profit in it for her. She would probably run a mile and be only too happy to offload it if she realised there is so much NE on it.

No as Zeb has said they are both responsible for 100% of the debt and the lender will chase the one they are most likely to get settlement from - probably your son. The worst case scenario is that if the property was sold in negative equity then the lender could make one or both of them bankrupt - depends whether they can be bothered to track and chase her as well. Not a good option for him if he ever wants a mortgage in the future.

I'm surprised the flat is in so much negative equity as (if bought in 2008 or 2009) it was well after the top of the boom and presumably there was a deposit at the time and your son has been paying back some of the capital each month. My stepson bought a new build flat (admittedly in the south East) at the height of the boom and it's probably only lost £10k in value over that time.

If he had enough income to get a mortgage on his own then he could offer her half the deposit back with a suggestion that she looks at what comparative properties have sold for (to prove it is negative equity). However, until his income rises enough to allow him to get the mortgage he is short of options.

Thanks Zeb,

Very interesting regarding the AST you refer to. I was only assuming that the girlfriend would be entitled to half the income. I thought that if she was named on the deeds, then she would have a legal claim on half of any income generated regardless of her lack of contribution. That is worth looking into now, as I had previously advised him against renting it out for that reason.

In a rare piece of contact from her, she has stated that she would not remove her name from the deeds as she wants her share of any profits - from that I can only assume she doesn't realise its in negative equity.

I'd still be interested to know what would happen to the outstanding debt if it went to court, ie would the court split the debt 50/50?

As you have said, this is a joint mortgage so the debt and ownership of the property is 100% to both parties.

If the property is sold, whether for profit or loss then this falls to the responsibility of the applicants...whether they are resident in the property or not. just because the girlfriend has walked away she is still as liable for each and every payment as your son...although it is a little harder to prove she is not paying and the bank will not care if the direct debit arrives as it should. The downside for the girlfriend is that if your son sells the house or gives it back to the bank and makes a loss of £20,000 then this debt is still jointly owned by both and the bank will chase both parties and not just the person who has been making the direct debits. She can walk away from the house but she cannot walk away from the legal contract she made with the bank....even though she has not paid a penny toward the house for 2 1/2 years. The contract still stands until it is renegotiated or the debt is paid off.

So far as the rent, she has decided not to pay into the mortgage, why ever would she think that she is entitled to any rent payable, especially if the rental agreement states your son as the landlord and not her. This would then make the legal financial contract (Assured Shorthold Tenancy (AST) would be between your son and the tenants and not her. If she wants to start paying back into the mortgage and make some back payments for what she may owe your son then you may decide to share, but until then I wouldn't worry.

Hi, this may be going over old ground so apologies if this is the case. I'm posting ths on behalf of my son who is in a predicament, and I'll try to be brief.

He and his girlfriend of the time took out a joint mortgage three years ago. Her part time income was needed in order to get the mortgage. She moved out after five months, never told the bank or anyone officially. He has continued living there and has always managed to pay the mortgage and other bills on his own. Flat is now in £20K neg equity. She refuses to pay anything and being difficult to contact. He cant sell without her permission, bank wont take her name off deeds, he doesnt earn enough to take on the mortgage on his own (even though he has been for three yrs). Renting it out is not an option (she'd be entitled to half the income anyway). I understand that both are liable for the debt, what is likely to happen if he does as she has done and just walks away from this and also stops paying the mortgage? He has been fair and open with the bank all through this. If the mortgage co. sell the flat and there is £20K owing, who pays it? How do they chase payment if no-one pays? if it went to court how would the debt be split?

Anyone know of any precedents for this?