Buying together - what to do?

Angus88

Hi there, my boyf and i had a disagreement about buying together and having to divvy up assets. I own a 2 bed flat which is currently being rented. I live with boyf in a 1 bed flat (not as nice flat as mine!). I pay him £300 as rent. We are thinking of buying a place together. We always said that I would continue letting my flat (saving it as a nest egg for our future), he would sell up and use his resulting equity towards a deposit for a bigger place (say the new place costs 200K). I always thought that my flat would be left as it is, he would put all his equity as a deposit (e.g.40k) into the new place(so 20%). Then we would have a joint mortgage, paying 50/50. I thought that he was happy with having a bigger share in the house (calculated as 60% for him which includes his share of the mortgage, (40%) plus his deposit being put in (20%)). It turns out that he not happy with this approach. He wants me to calculate the equity in MY flat NOW and then convert this equity amount as a % of the new place. i.e. I have 50K equity in my current flat and if we buy that house for 200k, then, on paper, I would have a slightly higher stake in the new house (not selling my flat). However,if we split up, I guess he means for us to sell my flat aswell, of which he has a 50/50 stake ...(the flat where he has not contributed anything). For some reason I'm not happy with this approach.....Is this fair? for me or for him? Sorry if this is confusing.... I'm confused!!!:(

Person_one

If you're having these disagreements now are you 100% sure you want to buy together? Also, is 300 a month a fair rent for half of a 1 bed flat? Do you also pay half the bills?

Angus88

No, the 300 is an all inclusive amount. we agreed this notional amount when i moved in 1.5 years ago. His mortgage is around 350 now and he pays around 200 towards bills....

Person_one

So he only pays out 550 but gets 300 from you? What is the other 50 spent on?

Richard_Webster

You are trying to square a circle.

Buying a property together involves a commitment to each other that may not be as great as marriage but it is getting on that way, and certainly more than, say, going on holiday together.

If you are committed to each other, your assets should be regarded as joint, period. If you are not committed what are you doing buying a property to live together in that way?

The very fact that you are disagreeing shows that you shouldn't be together, and there could be a lot of heartache and financial loss further down the track. Any "agreement" that you do come to about proportions is only as good as the ability to enforce it and sometimes this can cost a lot of money if there is an argument later.

smartpicture

Angus88 wrote: »

Hi there, my boyf and i had a disagreement about buying together and having to divvy up assets. I own a 2 bed flat which is currently being rented. I live with boyf in a 1 bed flat (not as nice flat as mine!). I pay him £300 as rent. We are thinking of buying a place together. We always said that I would continue letting my flat (saving it as a nest egg for our future), he would sell up and use his resulting equity towards a deposit for a bigger place (say the new place costs 200K). I always thought that my flat would be left as it is, he would put all his equity as a deposit (e.g.40k) into the new place(so 20%). Then we would have a joint mortgage, paying 50/50. I thought that he was happy with having a bigger share in the house (calculated as 60% for him which includes his share of the mortgage, (40%) plus his deposit being put in (20%)). It turns out that he not happy with this approach. He wants me to calculate the equity in MY flat NOW and then convert this equity amount as a % of the new place. i.e. I have 50K equity in my current flat and if we buy that house for 200k, then, on paper, I would have a slightly higher stake in the new house (not selling my flat). However,if we split up, I guess he means for us to sell my flat aswell, of which he has a 50/50 stake ...(the flat where he has not contributed anything). For some reason I'm not happy with this approach.....Is this fair? for me or for him? Sorry if this is confusing.... I'm confused!!!:(

I would say your suggestion is fair, his suggestion is unfair. Although if you were getting married, he could argue that it woudl be fair to pool all joint resources. Are you sure you've properly understood and explained here his suggestion? Maybe you should talk to him again to clarify, as it doesn't seem right.

If this is exactly what he's proposing, then I would be hearing alarm bells and wondering if this is someone I want to be financially tied to in the future, personally.

Katie-Kat-Kins

I think the fact that you are having these arguements is rather telling.

Now this is an old fashioned sounding question but one worth asking, because of what it says about the relationship and your views and commitment. Why are you buying a house together and not marrying??

If you are intent upon buying a house jointly whilst unmarried and in unequal financial positions you need to get legal advice not forum advice and you need to have a suitable agreement drawn up. Friends of mine did this when they moved in together and only one was able to contribute a deposit and get a mortgage in their name. It protected both their assets and contributions.

You need to protect the assets you have already and any contributions you make in future, and he rightly wants to do the same, however in a relationship neither should be looking to profit from the other.

Leew1231

My now wife moved in with me in my house, initially she paid half of all bills (not mortgage) and we pretty much halved everything. That was ok but if we had split up I think there are now common law rights so she would have been entitled to half of everything anyway. As it happens we got married so would probably be entitled to half everything anyway despite whatever this common law (if it exists) thing is. For about a year before we wed we had joint accounts, total joint everything. Which is how i believe it should be in such a relationship.

puddy

we bought a house and are not married, i dont want to be married but am committed for the long term till death do us part, ive never wanted to be someone's wife

our financial situation was not equal, i earn more and had more equity than he did, he had none

so, our equity in the house now, is split 30/70 in my favour, that includes calucations about the mortgage, should we ever split and go our separate ways, the house will be sold and and the equity split like that, its also to protect me financially as i dont have a pension and he does, so eventually we can sell the house when we retire, i take money from it for a pension and we use the rest to buy something cheaper

you have to make financial decisions when deciding about living together, to suggest that you dont is not reality or practical

Mini_Bear

Perhaps a silly question, but do you earn more than your boyf and is that the reason he thinks you should contribute more?
Have you talked about marriage and potentially having kids and dropping down to one salary? Would your boyf be happy with you not contributing financially at all at some point?!
I know a couple in this situation and the guy was happy to let his girlf keep her flat rented out as her pension for the future.
Like others have said if he is being unreasonable now, i would question why.

Person_one

I bought a house with my partner and we have no intention of getting married, we're not even kidding ourselves that we can guarantee it will last forever although we obviously both hope it does and work towards that aim!

We earn similar amounts but he had the money available for the deposit which I didn't so before signing anything we sat down and discussed what would happen if we split and came to an agreement. We bought together because it made more financial sense than renting even if we do split and I firmly believe in living together for a period before (or instead of) marriage.

Having said that, I'm not sure that its a good idea for the OP at the moment. As they've already been living together for a while maybe they should sit down and have the talk about whether pooling resources would work for them now or at any time in the future and if the answer is never then they should rethink.