First time buyer, gifted deposit

code-a-holic

Today I have had a offer that has set of a million questions!

We are currently renting a house that we adore. We have been here for 5 years. Our landlord is great! He was here today organising a new kitchen floor when the conversation turned to if we would like to buy the house. Of course we would if we had the deposit.

He asks if we would find it a help if he gave us all the rent we have paid him to date as the deposit. £44k!

There is a complex reason behind it, but basically he does not want his estranged family trying to have the property when he is gone.

As a first time buyer, we don't know anything, neither us or the the landlord have any idea about value so a valuation has been organised

Initial reasearch has uncovered that a gift from a non - relative of the deposit may cause a issue. Has anyone had experience of this, and of buying a home they already rent?

Thrugelmir

What's the catch?

megaginge

That is one INCREDIBLY bitter landlord if he's prepared to throw away 45k to make sure they don't get the house.

Letalone how he'll get rid of the profit he makes from the sale. Perhaps a year in an expensive !!!!! house with some fine cubans?

Frankly if he wanted to give me 45k I'd take it.

Here's a thought. Get him to deposit it into a family account, they then send it to you.

Money laundering regs are likely to not like that much.

Here's a better thoughts, I'm sure a solicitor can draft a letter for £100 that confirms he's giving you that as a gift with no obligation or terms, which should satisfy most.

But it's a fairly weird situation that.

code-a-holic

It is all a bit strange, a large amount of unique circumstances involved!

Our landlord owned this house for 10 years. It is a converted chapel he converted himself. He bought it as a project to take him out of London where he works. When we needed a house in the village I tracked him down and suggested as the house was sitting empty he might want to let it to us. He was a bit reluctant but since said it was a great thing to happen as felt a family just finished it off! Lovely!

He comes in 4 times a year to go in the loft to read the solar panel readings. Other than that he works as a bus driver in London while renting a room and on time off travels the world or goes in to his storage container near us to get his motorbike and play for the weekend.
A real free spirit and no ties to anywhere! He spends money in this place just because it burns a hole. He refused to take a deposit from us when we moved in saying it would be better spent on our family.

He even joked once that if anything happens to him while on the bike the place is ours.

This kind of situation does not come around very often I'm sure.

I'm sure we couldn't borrow to the value of the house, the big test will be to see if he's that chilled about getting the house of his hands that he will take a under market value price.

He no longer has contact with his sister over a fall out over their parents house left equally in the will and she refused to give him access then took 10 years to speak to him about buying his share. Many many court cases.

betmunch

megaginge wrote: »

Here's a better thoughts, I'm sure a solicitor can draft a letter for £100 that confirms he's giving you that as a gift with no obligation or terms, which should satisfy most.

Pay £100 to a solicitor to write a letter to the lender that confirms you don't meet criteria!

That's a bizzare suggestion if ever I heard one.

The correct answer is to simply use a lender that will accept a concessionary purchase from your landlord. This can be done with the right lender. Speak to a competent broker

megaginge

betmunch wrote: »

Pay £100 to a solicitor to write a letter to the lender that confirms you don't meet criteria!

I guess I was wrong then - but I'm surprised? Why is a gift of funds clearly explainable as no obligation a problem? What criteria exactly? Whilst the landlord sitution makes this strange I'm sure the general gifting scenario is common so am interested in what you think is wrong with this...

amnblog

There are £100 reason why this is wrong.


You don't need a solicitor to draw up a gift letter.


You mind find however, that the solicitor will insist that you take out a gifted deposit indemnity insurance at a cost of a couple of hundred pounds.


This protects you from claim if:


Your landlords later goes bankrupt
His estranged family contest his Will


If he is gifting £44,000 back from a commercial arrangement against which he has paid income tax I suspect his sanity can be questioned as a minimum!

betmunch

megaginge wrote: »

I guess I was wrong then - but I'm surprised? Why is a gift of funds clearly explainable as no obligation a problem? What criteria exactly? Whilst the landlord sitution makes this strange I'm sure the general gifting scenario is common so am interested in what you think is wrong with this...

It's because most lenders specify the gift is from a family member, therefore all your doing is having the solicitor confirm to the lender it doesn't meet their criteria.

Like I said though, there is at least 1 lender I can think of off the top of my head that will allow a landlord to sell at a lower price to a long standing tenant and use the difference as deposit.

If its done right you don't need to have an argument with a lender about how you feel their criteria is wrong

amnblog

betmunch wrote: »

You don't need to have an argument with a lender about how you feel their criteria is wrong

Not an argument that has ever got me anywhere.


We do argue they don't understand their own criteria and occasionally win that one.

betmunch

amnblog wrote: »

We do argue they don't understand their own criteria and occasionally win that one.

Agreed, winds me right up when I have to do that!

Semple

amnblog wrote: »

If he is gifting £44,000 back from a commercial arrangement against which he has paid income tax I suspect his sanity can be questioned as a minimum!

His sanity definitely needs to be questioned!!

He's not secretly an uncle or something OP?


I've heard of generous landlords maybe waiving the deposit, regularly refurnishing a house, not putting rent up. But to just randomly gift you £44k.