Buying a buy to let property with a friend

movilogo

The names on the Title deeds must match the names on the mortgage. Otherwise in the event of default/repossession the lender could not evict an owner who was not on the mortgage and gain possession....

Not correct. Title deeds may have someone who is not in mortgage. My wife and me are in title deed for our house but it's only me in mortgage. Bank can still evict if payments are not made though.

JQ.

What you're doing makes no sense to me. You are effectively funding a 100% BTL for your friend. What happens if the house value drops and your friend ends up in negative equity, how will they pay you back?

As you have a 50% deposit why not just buy it yourself and get a BTL mortgage yourself.

If you do want to buy one with a friend then you should both put exactly the same amount of cash into the venture, otherwise the % splits on things become very complicated indeed. I realise you probably think you are doing a 50/50 split currently, but I don't think you are.

jayniep_2

sonastin wrote: »

who is responsible for vetting tenants/selecting agent/negotiating rents/arranging or authorising repairs/etc? Is it a joint decision, does one partner have a veto, will you leave it to one or the other of you to arrange with the other trusting the decision?
what if one partner isn't doing their share (either paying the mortgage or doing the other tasks that fall to the landlord)? do you have remedies to make the other pull their weight?
how will you go about dissolving the partnership if one of you wants out? is one entitled to force the sale? how will you arrange an independent valuation if one is going to buy the other out so that it is at a fair price?

Lots of really good points that we need to make sure that we have considered before we go ahead.

Thanks everyone for your advice.

The idea is to each put half of the finance in, but the mortgage issue is making that difficult. I don't need to raise a mortgage on my share but my friend does. It's the fact that my name must also appear on the mortgage that seems to be causing the problem. Financially my friend will have no problems paying the mortgage, it's the 'what if's'........ that need to consider.

kingstreet

movilogo wrote: »

Not correct. Title deeds may have someone who is not in mortgage. My wife and me are in title deed for our house but it's only me in mortgage. Bank can still evict if payments are not made though.

Ordinarily such an arrangement isn't acceptable to a lender at the outset. I've known HSBC allow more names on the mortgage than on the deeds, but not the other way round.

Would you be kind enough to explain how this came about and with which lender, please?

I'm particularly interested in how the lender can apply the mortgage deed against someone who isn't party to the mortgage. It seems to fly in the face of natural justice.