You need to provide the following information to get a proper answer:
Information required for mortgage arrears and negative equity questions
What did New Beginning advise?
Your question is a bit confusing.
If you had bought it as your home, I am surprised that the mortgage deed allowed the appointment of a receiver? Did you buy it initially to rent it out? Again, New Beginning are excellent in this area, so presumably they checked that KBC had the right to appoint a receiver.
Lenders don't usually appoint receivers when the owner pays the rent over to them. Were you paying the rent over to KBC?
If you had rented it out, it was no longer your primary home? So saying it was unsustainable wouldn't be much help to you. As you had moved out and rented it, what happens to it should not affect your housing needs assessment.
The local authorities are very difficult to deal with. While the regulations say that a letter of unsustainability is needed, the fact that you have been effectively repossessed, should trump that.
However, I suspect that your story is more complicated. If you provide the full information, you may get a more helpful answer.