Any bank/property experts on the forum-i would value some advice

Nothing stopping him selling the house but he will need to clear the mortgage when he does so if it's got negative equity he's going to have to come up with the rest from somewhere.
Which could of course be your good self.
Criminal offence to open someone else's post so keep quiet about that.

My pet cat actually opened the letter so i just saw the details inside it. My cat is not normally in the habit of opening letters -first time ever infact after 3 years living in the house but I was surprised by the details. I could and would make up part of the difference and pay over market value by quite a lot. I was just surprised someone could be on an interest only mortgage with so much negative equity.

With interest rates so slow he is in a comfortable position now according to the letter. My question was more about putting an offer to him which might be better to accept now than what the future will hold for him when interest rates go up.

"My pet cat actually opened the letter so i just saw the details inside it"

"My dog eat my homework" gets a new spin

On a more serious note, there's nothing to stop you putting in an offer anyay without mentioning the letter, and anyway you could probably easily find out online what the property was sold for so if you had that to hand, and by cross referencing market values, you probably pretty much have most of the info the letter might say anyway.

Which reminds me, I was going to look up how much someone I know just sold a house for, just out of sheer nosey-b*stard-ness :)

paddle, the owner will need to take out a separate loan to cover the equity shortfall if he ever wants to sell the property. Solicitors would identify this during the sale process but if the gap is too much the owner may just choose to rent and save any surplus until a separate savings plan/pension drawdown could settle the difference. Your solicitor would not let you complete until that is evident and the seller could clear the nortgage release reequirements without funds being available. Whatever the outcome you would be well advised not to offer more than it's worth on the open market from any sympathy viewpoint.

I disagree- given the monies saved by not having to move etc and the inherent costs involved AND if you can see the property being of a sound investment it may be worth paying a bit over the odds. Value is in the eye of the beholder.

I would casually contact the owner and say you are interested in purchasing it and does he have any plans to sell. If not would he be so kind as to give you first refusal as and when to save on complications and hassle. Would be a good idea to have a written letter from your proposed lender which in principle guarantees a mortgage for a set amount; that gives you a strong bargaining position.

Have you checked out Zoopla for an up-to-date valuation? Based on my own area their price guides are pretty accurate with Zoopla quoting my neighbour at £295k... she sold it for £290k. I assume you already have but if you haven't then you might be surprised at how much house prices have increased of late.

One other point,make sure it isn't a leasehld property with 20/30 years to run on it because it could be a big issue. Banks will rarely give a mortgage on any leasehold with less than 70 years to run on it. If you mistakenly agree to buy the leasehold yourself there are companies like Simarc,etc who manage the leaseholds who can screw you down to pay big sums to extend or buy the leasehold,another big bill you have to account for.

Good advice treetop; in my experience most banks require a minimum of 25-35 years remaining on a lease at the end of the mortgage term

Lease requirements have changed recently.
It's now 70 years minimum for most lenders (including Halifax and Lloyds) and the RICS is suggesting a possible change to 85 years.

The issue is that when the leasehold property management companycome to sell most buyers are held over a barrel,especially when it is a probate sale, and screw the buyers/sellers for an unreasonable sum. You can go to an independent tribunal via RCS but the leasehold companies like SIMARC know how to play the game and stall until you have to walk away or pay.