Boyfriend/Lodger/Non Borrowing Occupier?!

hanfrangipane

Hi all,

I'm in the process of buying a house - all of the deposit is being contributed by me/my family and the mortgage will be in my name.

The idea is for my boyfriend to also move into the house with me although the house will be mine. We have arranged it this way as I was looking to buy a house anyway and we're at the point that we are ready to live together, but didn't want to have a joint purchase from the outset just in case things don't work out. I can afford the house on my own and it saves us renting somewhere together in the interim whilst we decide whether we can tolerate each other's habits!!

If things go well and we're still together in 2-3 years time when the fix I'm looking to use ends, we would look to put him onto the mortgage/deeds and we will come to an agreement of what proportion we each 'own' at the time if he has any capital to contribute ro match my deposit etc.

My question is whether he would be classed as a lodger and whether I therefore need to make insurers aware etc or anything like that?

I've seen plenty of instances on this board where only one 'half' of a couple are on the mortgage etc so it seems fairly common, but I'm not sure what we'd call this arrangement?

We intend to split bills and he will pay a notional 'rent'. We're not splitting bills and mortgage 50:50 but he currently pays lodge where he lives now and will probably pay me a similar amount, we haven't ironed out the specifics yet but the total estimated bills and mortgage will probably cost me £1,100 a month and he'll likely contribute £400 or so.

I'm just going through the mortgage application process now so will notify them when asked that he will be living there, but does anyone have any advice or information?

Thanks

Han

Pixie5740

He won't be a lodger though will he? By paying a "notional rent" he will be contributing towards the mortgage repayments which would give him a beneficial interest in the property.

hanfrangipane

That's what I'm trying to figure out! I'm not clear on what the distinction is.

For example, he's a lodger with a friend at the moment and pays a similar amount, think it's about £375 or something like that.

If he's living with me why would he have a beneficial interest in my home but not his friends home currently? Obviously anyone getting a lodger in is doing so to supplement their income and therefore by default contribute to the mortgage. Just wondering what element causes the difference between his current situation and our proposed situation?

I called my potential lender and they said it's absolutely fine since we're not financially linked, he would just need to sign a form claiming no beneficial interest, which he is happy to do. What he pays me would be the same to him as if he stays in his current lodgings, he doesn't see it as an explicit contribution towards the house, just like when he gives notice on his current place, he won't be asking for any of that back either!

Thanks for the reply, not trying to dodge anything, just figure out what the definition of this particular scenario is!

Mojisola

hanfrangipane wrote: »

For example, he's a lodger with a friend at the moment and pays a similar amount, think it's about £375 or something like that.

If he's living with me why would he have a beneficial interest in my home but not his friends home currently?

Because a partner can't be a lodger.

https://www.advicenow.org.uk/living-together/ has a lot of stuff about sharing homes.

Confusedandneedhelp

hanfrangipane wrote: »

That's what I'm trying to figure out! I'm not clear on what the distinction is.

For example, he's a lodger with a friend at the moment and pays a similar amount, think it's about £375 or something like that.

If he's living with me why would he have a beneficial interest in my home but not his friends home currently? Obviously anyone getting a lodger in is doing so to supplement their income and therefore by default contribute to the mortgage. Just wondering what element causes the difference between his current situation and our proposed situation?

I called my potential lender and they said it's absolutely fine since we're not financially linked, he would just need to sign a form claiming no beneficial interest, which he is happy to do. What he pays me would be the same to him as if he stays in his current lodgings, he doesn't see it as an explicit contribution towards the house, just like when he gives notice on his current place, he won't be asking for any of that back either!

Thanks for the reply, not trying to dodge anything, just figure out what the definition of this particular scenario is!

The destinction im afraid is quite simple, he doesnt sleep in the same bed as his current landlord...

hanfrangipane

Mojisola wrote: »

Because a partner can't be a lodger.

www.advicenow.org.uk/living-together/ has a lot of stuff about sharing homes.

Thank you - will have a read, although the link isn't working at the moment.

Logically it makes sense, just wasn't sure on the technical definition.

The lender doesn't have a problem with it so I guess it's not likely to cause an issue, I just don't want to inadvertently get anything wrong in the process

pmlindyloo

As long as your boyfriend signs a legal document to say that he will not claim a beneficial interest in the property then it should be fine.

This is what you need to avoid:
http://www.adviceguide.org.uk/england/relationships_e/relationships_relationship_problems_e/relationships_relationship_breakdown_and_housing/relationships_if_you_live_with_your_partner_-_relationship_breakdown_and_housing/relationships_if_you_live_with_your_partner_and_you_own_your_home_-_relationship_breakdown_and_housing/relationship_breakdown_and_housing___beneficial_interest_if_your_partner_owns_the_home.htm

hanfrangipane

pmlindyloo wrote: »

As long as your boyfriend signs a legal document to say that he will not claim a beneficial interest in the property then it should be fine.

This is what you need to avoid:
http://www.adviceguide.org.uk/england/relationships_e/relationships_relationship_problems_e/relationships_relationship_breakdown_and_housing/relationships_if_you_live_with_your_partner_-_relationship_breakdown_and_housing/relationships_if_you_live_with_your_partner_and_you_own_your_home_-_relationship_breakdown_and_housing/relationship_breakdown_and_housing___beneficial_interest_if_your_partner_owns_the_home.htm

Having had a read of the relevant sections of both sites it would appear that if he signs the beneficial interest form and we draw up a 'Living together agreement' to specify what he is contributing towards, then it should clear up the beneficial interest point.

I can't actually see anything stating explicitly that a partner can't be a lodger, unless I'm missing something.

I will need to clarify whether the fact that he's not a lodger means that I don't need to declare it as lodger income under the rent a room rules etc too.

Thanks for the replies folks

Eejay

In this situation, I think I'd split bills like council tax, electricity, broadband, food etc - and put money aside in a savings account rather than contributing extra towards the mortgage. If you decide to add his name he's then got some money to give you when the time comes. Otherwise he's basically helping you pay off the mortgage and you'll be the only one to benefit from it if you decide to split up.

hanfrangipane

Eejay wrote: »

In this situation, I think I'd split bills like council tax, electricity, broadband, food etc - and put money aside in a savings account rather than contributing extra towards the mortgage. If you decide to add his name he's then got some money to give you when the time comes. Otherwise he's basically helping you pay off the mortgage and you'll be the only one to benefit from it if you decide to split up.

Thanks Eejay. He wants to pay more than just to bills though, his logic being that if he was living elsewhere he would have to incur rent/lodging costs.

It's a tricky one - I don't want to be seen to be benefiting from him paying towards the mortgage and him not benefiting from ownership, but he says that he wouldn't feel right just paying bills and half food because if I were to get an actual lodger then they would pay this.

If I rented out a room to Joe Bloggs, they would pay £350-400 incl bills in our area. Even if he pays roughly market rate, I'd still be paying significantly more than him and also shouldering the risk of the debt etc.

Between us we have agreed that it's a fair split, I'm just trying to fathom whether the legalities agree with us!

lincroft1710

If your boyfriend is cohabiting, then for Council Tax purposes you are treated as if you were married and you both become liable for any CT debt.

So if you do share the CT bill, and he fails to pay and then does a runner, the council can legally chase you for the whole amount owed.