Hi Sussie, and Landmark
Sorry to hear you are experiencing the problems that often arise with Finlock gutters.
I already wrote it 'as it is' - finlock gutters were a crude post-war solution to providing 'guttering' when steel was in short supply. They tend to leak - down on to the building walls, into the cavity, even draw moisture in to the property through the mortar joints, and, via cold bridging, provide a perfect cold surface at top of bedroom walls to create a condensation problem - this due to these 'gutters' being moreorless horizonal yet being totally without adjustment (some water usually sits in them, freezes in them, allows a bird bath in them, until it dries up) and due to their being very many vertical mortar joints that go from outside all the way to the inside of your bedroom/other walls.
If you can afford to waste money, then one solution is to turn up the heating and open the windows - but this is a waste of money and not the right thing to do.
Or maintain the gutter linings, AND paint the exterior side/underside of the gutter using elastomeric paint (far far better and far far more expensive than bituminous paint)
In answer to your questions:
1. YES. You can cut off the over hang even on bungalows.
The finlock blocks, including the poured lintel within the blocks above your walls is load bearing, but the over hanging 'gutter profile' is NOT load bearing. It can be carefully removed, reasonably close to the walls and modern fascia fitted.
TLG do a very nice job using virtually maintenance free extruded aluminium guttering, and use patented parts to join our new aluminium gutter to your neighbours finlock, seamlessly, if your bungalow is not detached.
2. Is your mould problem the result of water ingress or of condensation?
Difficult to be certain - it could be a bit of both.
In my house, the final solution:
... both to eliminate all further maintenance of the finlock gutters, remove the cold bridge they create, and never again suffer moisture ingress, was to have them cut off, modern fascia fitted, continuous aluminium guttering fitted, and, at significant extra effort, remove the plaster on the inside wall (though this step is optional) and insulate inside with 25mm celotex (or equivalent PIR board), over boarding with either plasterboard or fermacell (I used the latter), both across the wall and within the window recess - cheaper if you have someone handy in the family to do it, as it is a fiddle taking a little time and effort.
Now the walls are very well insulated, with scarcely any temperature gradient between the cavity wall and the finlock blocks at the top of the wall in each bedroom. We still need to ventilate to avoid condensation, but the cold surface is gone, and our heating bills are likely to be low, our comfort levels in winter and in summer, likely to be much improved.
3. finlock linings: if you are lucky and your finlocks are in good condition, with good mortar joints, and they have been maintained well over the last 50 years, with a good coat of well applied sealing paint, and your property did not suffer through combination of poor mortar pointing and bad weather exposure, then they might be worth maintaining, but I doubt it - the cold bridging increases your heating bill, makes condensation more likely, and reduces comfort by increasing cold drafts. Why fix a bad 'bodge' of a solution when you can add value to your property, reduce your heating bill and, short of the finlock blocks disintegrating, permanently eliminate the main problems?
Yes, if one of your finlocks are on the verge of collapse above a window then this will need some separate attention to resolve - during good weather, prop support roof, remove section of finlock, fit insulated lintel and brick/blockwork to correct height to match finlock on either side. The new guttering can be fitted to this on the outside. But I believe that the finlocks do not commonly collapse - they have a poured concrete lintel within them, and unless very badly maintained they are usually good for some more years. The fitting of modern fascia also provides some strengthening - barge boards are screwed at intervals to the finlock blocks.
I do not like the appearance nor maintenance likely in normal plastic gutters - they tend to look an eyesore compared to the finlock gutters nearby, though this is still better than keeping finlock gutters with their myriad short-comings. Continuous aluminium gutters must be a better bet.
If you know that there is a significant sagging of a finlock gutter above a window, whether this is outwards (which is common due to the unsupported overhang that provides the 'gutter profile') or simply downwards towards the middle of a window, then this may require remedial attention, perhaps from a builder fitting a steel lintel and a row of blockwork, prior to commencing the gutter work - but speak to the gutter company before you act, they will know the correct approach.
Initial solution to damp? turn the heating up and increase ventilation, esp. late evening and early morning. Finlock blocks are condensation prone, esp. if you have had double glazing fitted, years ago before they had ventilation strips fitted: if you have slip vents, use them! If not, then upgrade your ventilation to modern building standards in bathrooms and the kitchen, and stop drying your laundry in the house! (if you must, do it in one room, with door closed, radiator on high, and a window kept ajar.
Upgrade your bathroom and kitchen with extractor fans and use them - getting rid of excess steam really matters - it will condence on the non-cavity, finlock part of your walls if they are not insulated. Removal decreases this problem.
Roof insulation carried out carelessly also greatly reduces ventilation - the moisture has to go somewhere! with finlock gutters the coldest part of the wall is at the top, and this will get full weight of moisture from the air condensing. Get the finlocks cut off and never look back!
TLG did fine for me, but you get what you pay for: aluminium gutters cost more than plastic, and TLG neatly join new gutters with neighbours finlocks using patented parts ... so no falling out with neighbours!
Good luck.