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Diary of a repossession: One couple describes the agony of losing their luxury £400,000 home in the credit crunch

By Daily Mail Reporter
Last updated at 12:40 AM on 26th November 2008
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What is it really like to go through the agony of losing your home in the credit crunch? That's what happened to the Hinds family.

Elizabeth, 54, a clerical officer, has been married to Paul, 50, a businessman, for 24 years, and they have two children, Daniel, 23, and Adam, 21, who live with them.

Their luxury £400,000 four-bedroom house in North Frodingham, East Yorkshire, was repossessed by HBOS in September. Now, saddled with tens of thousands in debts, they are living in a rented two-bedroom holiday cottage. This is Elizabeth's diary of despair. . .

MARCH 2006

We're throwing a party to celebrate the completion of our new £20,000 bespoke wooden kitchen and my father's 90th birthday. As I prepare food for 35 guests on our range cooker and sunshine floods in through the French doors, I can't help feeling proud.

It's been seven years since we moved to Richmond House, and since then we've completely redecorated. Now, with its four double bedrooms, two bathrooms (complete with roll-top baths with claw feet), large conservatory, utility room, office, and garaging for two cars, it is our perfect family home.

I'll never forget the day in 1999 that Paul came home and said he'd seen the house advertised for sale. He was so excited he wanted me to see it straight away - and as we peered over the fence into the acre of formal gardens with two ponds, we both fell in love with it.

Two days later, our offer of £159,500 was accepted, and within a week we'd found a buyer for our old house. A couple of months later, we moved in.


Charity: Paul and Elizabeth Hinds and their two adult sons are sharing a two-bedroom holiday cottage, paid for by a friend


APRIL 2006

House prices are rising fast and both Paul and I think investing in a buy-to-let property is a good idea. Paul wants to retire at 60 and believes we need to make the next ten years really work for us in terms of earning money. He's always worked hard.

Until 2004, he had a senior position in a printing company, earning £65,000 a year. Then two years ago, in 2004, he set up a successful business supplying pre-paid phone cards. Now, that company is running itself and, to add to our savings, he wants to take on a new challenge.

We remortgage Richmond House to raise the £60,000 deposit and secure a low-rate mortgage on a £110,000 two-bedroom terrace. We're in it for the long term, planning to sell in ten years when the price will have gone up even more. There's a tenant already in it, and the rent easily covers the mortgage.

Meanwhile, to add to his business, Paul is on the lookout for a new company to buy.

MAY 2006

Exciting news. Paul and a business partner have found a printing company to buy. It's on the market for £700,000. It sounds a lot of money, but the turnover is £1.3million a year and it already employs 22 staff.

Together with some other investors, some savings and a loan guaranteed on our family home, he and his partner raise a £350,000 deposit to put down. The rest of the £350,000 business loan will be paid off monthly from the company profits.

I'm not worried, as I trust Paul's judgment completely - after all, he's been a high earner paying 40 per cent tax since he was 27, and he's never let us down.

Paul buys a new BMW Z4 plus a small Rover for our younger son Adam, who's joining him in the new business. That weekend we take both the boys out to a restaurant for a celebratory dinner.


Before: Daniel and Elizabeth Hinds outside the luxury £400,000 four-bedroom house - before it was repossessed

AUGUST 2006

PAUL has been coming home very stressed. The reality is starting to emerge that the business simply isn't what we thought it was. Bills have been arriving - some for tens of thousands of pounds.

Paul's hardly drawing any salary at all. Even our savings are going into the business to pay the staff and these unexpected bills.

With a decreased income - we have only my £500-a-month salary - and our own outgoings to pay (the £1,900-a-month mortgage on Richmond House and the domestic bills such as food), we are dipping deeply into savings. We can only hope that these are teething problems and they won't last long.

I am economising as much as possible, but our overdraft is increasing. Gone are the days of food shopping in M&S; now I am bargain-hunting in Morrisons. But even if I go full time, my salary just isn't enough to stretch to paying all our bills, which are spiralling out of control.

SEPTEMBER 2006
I have come to dread opening the post. Today a gas and electricity bill for £700 arrived.

Our son Daniel, who manages a garden centre, has paid off some of it. Paul rang the utility company and it has said we can pay the rest off at £50 a month. But without any money coming in, it is a struggle to pay even that.

OCTOBER 2006

Every morning, I wake up feeling sick that for the first time in our lives we are struggling financially.

Paul and I find talking about the situation so upsetting that some nights we just sit in the lounge in a strained silence. Adam and Daniel are both withdrawn: they know how bad the situation is and constantly offer us money, even paying for the weekly food shop.

I can't help worrying that soon we won't be able to pay the mortgage and we could lose our home.

Every time I look out of the French doors at our beautiful garden, I can feel tears welling up at our situation. I remember how the boys loved this garden when we first moved here (we filled it with badminton and football nets, a trampoline and climbing frames). The thought that, ultimately, we could end up losing it is unthinkable.

NOVEMBER 2006
Paul seeks advice from the Bankruptcy Advisory Service Limited (BAS). Bankruptcy seems such a drastic step and we really hope it won't come to that, but the phone is constantly ringing with people asking us for money and we can't carry on on our own any longer.

The ray of hope is that they discuss with our creditors at the business paying bills in instalments. Only we won't know until January if this is acceptable.

DECEMBER 2006
A subdued Christmas. We gave our sons their usual present of a £150 cheque each, but they haven't cashed them.

Hanging over our heads is the worry that we could still be facing ruin. If we can convince the creditors to agree to our arrangements to pay in January, then we can continue trading, and Paul is convinced he can still turn things around.
If not, we don't know what we'll do.


Luxury: The four-bedroom, detached house had a grand conservatory

JANUARY 2007

We hear the news we've longed for: the business can continue trading. Paul and I are so relieved that we go out for a meal - paid for on a credit card. It's the first time we've been out for months.

FEBRUARY 2007

Orders are slowly coming in, but not fast enough - Paul and I are still scratching around for money. Our credit card debt alone is approaching £50,000 and we are falling behind on those repayments.

I can't help thinking how just a year ago we were going out for meals, having people over for dinner and I would think nothing of buying a bottle of wine. Now I can barely afford a haircut.

MARCH 2007

I wake in the middle of the night to find Paul poring over bank statements, and I'm knotted inside with worry.

Despite the rent coming in, we're finding it hard to pay for the upkeep on our buy-to-let. We will have to sell it. Fortunately, the boys decide to buy it from us and manage to secure a joint mortgage.

I'm relieved and pleased for them as we still feel property is a good investment.

JUNE 2007

Disaster. Just as we think we are finally climbing out of the nightmare and the business is beginning to turn around, floods sweep through Hull.

It even makes the national news. Our business isn't flooded, but lots of our customers have been and the order book takes a massive tumble as they cancel jobs.


The property also has a large garden, but Halifax has reduced its asking price from £400,000 to just £260,000

JULY 2007

The newspapers are full of the American credit crunch and saying that banks here are facing liquidity problems. Houses aren't selling so well, either.

I am wondering how thinly I can slice a small chicken to share between all four of us when Paul comes home to tell me the company's finished and he's been advised to take bankruptcy. This means he also has to relinquish his holding in the pre-pay phone card business.

I sink down in a kitchen chair, head in my hands, shattered at the news.

AUGUST 2007

Paul comes home white-faced after making all the staff redundant, including our son Adam. Our BMW and Adam's car are returned. Paul has tried so hard and I don't want him to see how desperately upset I am, but I can't help but cry at the news.

SEPTEMBER 2007

Paul is talking of getting another job, but just as we are discussing it, news of the Northern Rock crash fills the papers.

With no money coming in, Paul and I agree we have to sell the house. An estate agent values it at £400,000 and, heartbreakingly, it goes on the market.

NOVEMBER 2007

Another blow. Paul has been to see if he qualifies for any benefits, but despite the fact that he has paid so much in tax for all these years, as he was self-employed he hardly qualifies for any help at all. It seems that to get benefits in this country you need to have never worked.

He's been sending off job application forms, but nothing has come in. Mortgage rates are rising and our mortgage payments are £2,400 per month, but we can hardly afford to eat.

We write to the bank saying we cannot afford to pay it this month, offering them £500 a month instead and telling them the house is up for sale. A year ago defaulting would have been unthinkable, but we have no choice.

DECEMBER 2007

We rely on handouts from friends and family and go through the motions of Christmas: I prepare a turkey dinner as usual, but there are no presents this year.

The estate agent rings to say can we drop our asking price by £20,000? We refuse. We need every penny.

JANUARY 2008

On January 14, Paul is officially declared bankrupt and our original company goes into liquidation, too. Although we knew it was coming, and friends know the reality of it, the shame of it is still terrible.

We have heard nothing from the bank. We hope this is good news, as it knows we are trying to sell our home.

MARCH 2008

I am shaking as I read the letter from the bank saying it is seeking repossession in June.

We are now desperate to sell, but with the onset of the credit crunch there are no viewings. Our estate agent says it isn't only us, the whole housing market is grinding to a halt.

Meanwhile, Paul has been to see East Riding Council to see if we would be eligible for council housing but, shockingly, it has only bed and breakfast available.

APRIL 2008

The BAS writes to the bank on our behalf with the offer from a friend to pay £500 a month on the mortgage until the house is sold. But the bank says the only way to stop the repossession is to pay off all the arrears in a lump sum - a staggering £50,000 (the amount that's built up ever since we have not been able to pay the monthly payment in full), including fees and accrued interest.

We phone to discuss it, but the bank asks us to hand over the keys. We refuse because we still hope to sell.

MAY 2008

Paul goes to court to get an extension of time to enable us to find somewhere to live, staving off the eviction until September. Hope rises that there is still a way out of this.

JUNE 2008

Misery everywhere with talk of the credit crunch. No viewings, no offers. And no job offers for Paul, either. A friend has offered to pay for us to rent a nearby two-bedroom holiday cottage and to put our furniture into storage. It's so kind that I am close to tears again.

AUGUST 2008

We can't face the bailiffs. The weekend before the eviction, we post the keys back to the bank.

Our sons will have to share a room in the holiday cottage, but they make the best of it, joking that it's like a childhood adventure.

Clearing out my hand-made kitchen cupboards as we prepare to leave, I am suddenly overwhelmed by tears. We try to keep things in perspective - worse things could happen - but the truth is we have lost everything.

Looking around the cottage, it seems so cramped in comparison to what we have just left. It's the end of an era and the future looms ahead, terrifyingly uncertain.

SEPTEMBER 3, 2008

'Our' house is officially repossessed. When we leave, I can't look back because I feel so sad and lonely.

OCTOBER 2008

Incredibly, the nightmare isn't over. The amount we now owe on our mortgage has leapt from £250,000 to £330,000 because of repossession fees.

Worse, for a quick sale HBOS has reduced the asking price to just £260,000.

Devastatingly, this would leave a shortfall of around £70,000 to pay back. We thought having our house repossessed was the end of it, but we were terribly wrong.

The only good news is that as Paul did nothing illegal, his bankruptcy has been lifted early. But he'll find getting credit almost impossible.

NOVEMBER 2008

We are reeling with anger. HBOS has accepted an offer of just £255,000 for Richmond House. We can't believe how uncaring it is to sell the house for such a ridiculous price.

The revelation that after all this we still owe £80,000 to the bank in the run-up to Christmas - and they can bankrupt me, too, to get it - sends us back into despair.

It has been a truly hellish year - though thousands of other families have been living through the same ordeal - and there is no doubt this Christmas will be the bleakest of our lives.

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