Selling a percentage of our home to our son

Gorgeous_George

This has DISASTER written all over it.

If your son buys 25% of your house he would be entitled to 25% of the rentable value (at market rates). So, if similar houses rent for £1200 per month, he should expect £300 per month from you. Any less and he is, effectively, gifting you the money.

You are asking him to take a risk for little, if any, reward.

He would be better off saving as much as possible. £100K mortgage would cost upwards of £700 per month. If he can afford this mortgage, he can afford to save £700 per month.

What happens if he meets Mrs Right? You would sell your house for its new value which could be 75% of current value if HPC is moderate. Does he then have £25K of debt?

DO NOT DO IT.



GG

dolce_vita

Diver wrote: »

Your comment is inaccurate, unhelpful and out of sync with the etiquette of this forum

My comment is not inaccurate.

I really did say that to the other poster I referred to

lynzpower

i have to be honest - I couldnt agree more.

If your son wants to buy his own property, or withdraw the ewquity for "whatever reason" whats he gonna do? Force you to sell?

I would say you would have him over a barrell.

YOu can still get PLENTY of properties around 100k in the UK, whats the difference if he gets one of his mates to live in it for free? If you are not paying rent as GG says, you are effectively taking his mortgage interest and giving him nothing in return.

This is moneysavingexpert, and im moneysaving on your boys behalf

cant you just sell and downsize, freeing the equity to live the life of riley and relaxation that you seem to really want?

Diver

Thanks very much for the constructive and helpful comments. It's made me re-think the entire proposition which I will now ditch

Badger_Lady

lynzpower wrote:

YOu can still get PLENTY of properties around 100k in the UK, whats the difference if he gets one of his mates to live in it for free?

Can't find it on Rightmove now, but a few months ago there was a block of two 2-bed flats for £80k in City Centre in Wales! Rental income from those? About £750pcm - would comfortably cover mortgage.

Sorry Diver - I feel like we've all bombarded you a bit! Hope everything goes well, whatever he decides to do :-)

pickles110564

Diver, you have screwed up your own finances and see a way to get yourself out of it at the expense of your own son.

I guess the saying is true you can choose you friends but you are stuck with your own theiving rotten family.

Sort you own mess out and dont screw up your sons life as well:mad: :mad:

F_T_Buyer

This does sound like a disaster, but hey it's up to you.

My concern is the point you make about people in the Army not being able to afford a place at the end of his military career. But you say you won't pay him rent?

So, all he's really getting in return is house price inflation on his proportion but it's going to cost him x amount in interest. Now, I can tell you for certain, interest on a mortgage will be far higher than any HPI over the long term; especially now after we've had a decade long boom.

Why doesn't he just save what he would pay on the mortgage and put it into a bank account? It seems like this idea of yours is for your son to invest in something that provides no income, that's not investing, it's speculating.

If he charged you rent, at approx 6% of his equity (£6k a year for £100k equity) and you pay all the upkeep I could understand the proposal. If rent were to be paid, how would the rent change over time (increase/decrease)?