Consumer Rights: 'I'm too ill to work and can't rent out my buy-to-lets'

With no prospective tenants in sight for two flats, how to pay the mortgages with no wage coming in?
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The Independent Online

Q: I have two buy-to-let properties – nice, modern flats in good locations but it has been difficult to let them out. The tenants move out of both at the end of next month and I'm worried because the estate agents don't seem to be getting any interest.

However, the main problem is that because of a long-term illness, which is getting progressively worse, I have had to give up work. That means that if the flats aren't let I simply won't be able to pay the mortgages.

I will to try to claim some benefits to cover my essential living expenses but what can I do about the flats? I don't have any insurance that might cover the repayments and I have no hope of getting better and being able to pay off arrears at a later date. Is there anything I can do?

SK, Derby

A: I'm sorry to hear that you are so ill. Unfortunately, while you may be able to claim benefits for yourself and your family, as long as you meet the criteria, you won't get any help for rent or mortgage payments on property other than the one you live in. You may be entitled to Employment and Support Allowance and help with mortgage payments and council tax. Under the rules for ESA if you have an illness or disability that severely affects your ability to work you will get increased financial support and won't be expected to prepare for a return to work.

Your local advice agency, such as the Citizens Advice, will be listed in the phone book. I would advise you to get your benefit applications submitted as soon as possible.

In the meantime, think about the options as regards renting out your flats. Any income from rents may affect the benefits you get, or may stop you getting some benefits at all. You are jumping the gun by assuming that you won't be able to find new tenants. It might be worth trying new agents, advertising locally and telling all your contacts and local employers that the flats are coming up for rent.

However, if you can't let them out again see if you can afford to reduce the rents to attract tenants. Some people are struggling to find places they can afford because of new rules that cap the amount of housing allowance claimants can get while rents have soared. The other option is to sell. If you fall behind with the mortgage repayments or fail to pay them the lender is likely to repossess and sell the flats. If the sale prices don't cover everything you owe the lenders may take action to get the money. It would help if you can sell at better prices before that happens.

the first thing to do is to talk to your lenders. They may accept reduced payments or restructure your loans which would allow you to reduce your rents. If you do have to sell up the lenders are more likely to give you time to find buyers if they know the circumstances.

Q: I have just been made redundant and set myself up as a freelance consultant. I'm doing the same kind of work as I have done before in technology and design but I'm not sure whether or not I should be a freelance worker or a limited company. It is hard to get a direct answer to how to go about being self employed. What should I do?

BB, east London

A: The first question is whether or not you're really self-employed. If you do work for more than one company and can choose your own hours, send someone else to do the work for you and provide your own equipment, you are probably self-employed.

If you work for only one company, your former employer for example, there will be a question mark over your employment status particularly if that carries on for a long time. The first step is to register as self-employed with Her Majesty's Revenue and Customs at

If you operate as a freelance sole trader you pay income tax on your income after allowable expenses and any tax reliefs.

Talk to PCG, the organisation for freelancers for the information you need on 020 8897 9970 and

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