Tips for newly cohabiting couple...

norabatty_2

iamana1ias wrote: »

No, you need to formalise the 'rent' bit. If you have a contract that he rents from you then he has no claim over the part of the mortgage his rent has paid. If he just gives you money equivalent to half the mortgage and bills, he has a claim.

You've got me!

Just to give you an example. When my (now) husband moved into his flat (which he owns 50/50 with his Dad), he paid his 50% mortgage (which was approx £380 per month) and he also paid council tax, ground maintenance, all other "owner-related" costs. I did not contribute to these costs at all. I did, however, pay him rent, £200 per month, £100 of which went to his father. After that, we shared all costs such as gas, electricity, food, joint holidays equally.

This way, I was not paying for all of his food or all of his hot water. I was paying for 50% of our food and our hot water. He may have ended up paying slightly more than me (he paid £280 per month plus bills whereas I paid £200), but he had a house at the end of it all if it didn't work out and I didn't.

So, if you want to do the same thing as I did, what you should do is work out how much it would cost to rent your house, and then charge him half (assuming that there are only going to be 2 of you living in the house). Now that we are renting the place out, I appreciate I really should have been paying him £250 per month, rather than £200, as we get £500 per month for it, so make sure you're charging the average, so neither of you is being treated unfairly.

HappyMJ

alipops1986 wrote: »

Would this mean i'd have to declare the rent for tax purposes?

No you don't declare rent received from your partner at all.

HappyMJ

norabatty wrote: »

So, if you want to do the same thing as I did, what you should do is work out how much it would cost to rent your house, and then charge him half (assuming that there are only going to be 2 of you living in the house). Now that we are renting the place out, I appreciate I really should have been paying him £250 per month, rather than £200, as we get £500 per month for it, so make sure you're charging the average, so neither of you is being treated unfairly.

That doesn't sound fair to me. My mortgage costs me about £183 per month in interest. Purchased in 2002 for £78k on a 75% interest only mortgage @ 3.75%. The rent for a similar 3 bed property in this area is at least £550 per month. So is it OK to ask my girlfriend for £275 per month for rent if and when she decides to move in? I don't mind it means more money for me. I was only going to ask for £21 per week.

norabatty_2

alipops1986 wrote: »

Would this mean i'd have to declare the rent for tax purposes?

Officially, I think you are supposed to if you receive over a certain amount, but I think it's a few grand so you probably wouldn't reach it. Most people don't do it anyway.

Make sure all direct debits are in your name and come out of your bank account. Remember, the house is ultimately your responsibility and this will not change when your boyfriend moves in. He can send his proportion of the direct debits to you by standing order.

If you've any questions about my last post, shout. I hope it makes sense!

Person_one

HappyMJ wrote: »

That doesn't sound fair to me. My mortgage costs me about £183 per month in interest. Purchased in 2002 for £78k on a 75% interest only mortgage @ 3.75%. The rent for a similar 3 bed property in this area is at least £550 per month. So is it OK to ask my girlfriend for £275 per month for rent if and when she decides to move in? I don't mind it means more money for me. I was only going to ask for £21 per week.

I agree, I'm all in favour of people paying their way but it seems very wrong to actually make a profit off a partner moving in, if that's what you want get a lodger instead!

alipops1986

norabatty wrote: »

You've got me!

Just to give you an example. When my (now) husband moved into his flat (which he owns 50/50 with his Dad), he paid his 50% mortgage (which was approx £380 per month) and he also paid council tax, ground maintenance, all other "owner-related" costs. I did not contribute to these costs at all. I did, however, pay him rent, £200 per month, £100 of which went to his father. After that, we shared all costs such as gas, electricity, food, joint holidays equally.

This way, I was not paying for all of his food or all of his hot water. I was paying for 50% of our food and our hot water. He may have ended up paying slightly more than me (he paid £280 per month plus bills whereas I paid £200), but he had a house at the end of it all if it didn't work out and I didn't.

So, if you want to do the same thing as I did, what you should do is work out how much it would cost to rent your house, and then charge him half (assuming that there are only going to be 2 of you living in the house). Now that we are renting the place out, I appreciate I really should have been paying him £250 per month, rather than £200, as we get £500 per month for it, so make sure you're charging the average, so neither of you is being treated unfairly.

Thanks very much!
So, a house similar to mine is for rent at £475 this means £237.50 each rent, however, my mortgage is £450, so we'll call it £225
Then we go halves on the bills which would be £60 each, again for ease. Therefore, he gives me rent of £285, then we halve the food bills?

Does this sound more like it

norabatty_2

HappyMJ wrote: »

That doesn't sound fair to me. My mortgage costs me about £183 per month in interest. Purchased in 2002 for £78k on a 75% interest only mortgage @ 3.75%. The rent for a similar 3 bed property in this area is at least £550 per month. So is it OK to ask my girlfriend for £275 per month for rent if and when she decides to move in? I don't mind it means more money for me. I was only going to ask for £21 per week.

I think that's different because you are on an interest only mortgage. At the end of your term, you still won't own the house. So, in that case, I would split the cost of the mortgage. However, most people are on a repayment+interest mortgage, and their mortgage would be much higher than yours, and in that case, I think they (the owner) should pay more for the assurance that at the end of it all, they still own part of a house.

iamana1ias

alipops1986 wrote: »

Thanks very much!
So, a house similar to mine is for rent at £475 this means £237.50 each rent, however, my mortgage is £450, so we'll call it £225
Then we go halves on the bills which would be £60 each, again for ease. Therefore, he gives me rent of £285, then we halve the food bills?

Does this sound more like it

Your bills are £120 a month?? Including council tax, tv license, sky tv, electric, gas and water??

HappyMJ

alipops1986 wrote: »

Thanks very much!
So, a house similar to mine is for rent at £475 this means £237.50 each rent, however, my mortgage is £450, so we'll call it £225
Then we go halves on the bills which would be £60 each, again for ease. Therefore, he gives me rent of £285, then we halve the food bills?

Does this sound more like it

Just so long as £475 does not exceed the interest payable on the mortgage every month then yes it's fine. You also need to pay the buildings insurance yourself and any work required on your property yourself such as boiler problems. Anything that a landlord would normally pay for.

HappyMJ

norabatty wrote: »

I think that's different because you are on an interest only mortgage. At the end of your term, you still won't own the house. So, in that case, I would split the cost of the mortgage. However, most people are on a repayment+interest mortgage, and their mortgage would be much higher than yours, and in that case, I think they (the owner) should pay more for the assurance that at the end of it all, they still own part of a house.

Ahhhhh yes but my mortgage is fully offset I don't physically pay anything from my income. I do own the house outright but have a facility/mortgage at the bank where I can drawdown the full balance of the mortgage and invest the cash elsewhere which I have done as the interest earnt on savings accounts exceeds the interest payable on the mortgage.