Buying a house alone but girlfriend moving in (London)

mither_2

Hi All,

I am currently trying to buy a property in London and would appreciate any on buying property here but also my strategy in general.


I want to move in with my girlfriend and am also tired of paying £1k per month to rent a very small flat.


We've never lived together before but I don't want to rent somewhere and have to move and pay various fees etc. At the same time we've never lived together before and so I'm reluctant to buy a property together in case we separate and then have to go through the hassle of selling the property and dividing up the asset (even more tricky if the property is in negative equity by then).


My solution is to buy a property and invite my girlfriend to move in. If things go well and we stay together then she wants the option to buy into the property which I'm completely fine with.


We want to live together and financially it makes sense as together we pay c£2k per month including bills to live in two tiny flats.


Based on the deposit I have and the properties that I'm looking at my monthly repayments would be around £1,200 which is close to what i pay in rent currently. The bills would be higher on a house (council tax and utilities etc) and have based all of my costs on just what I could afford i.e. the monthly funds my girlfriend contributed would just be extra cash. I wouldn't include any funds she offered in my budget (hopefully we stay together but it may not work out so I need to assume it won't when working out a budget).


Even if I were single I would still be buying a property on my own and so it is even better that she wants to move in.


I was originally going to buy a flat but have now ruled this out for the following reasons:
We would like more space
A 2 bed flat costs £300k where as a 2/3 bedroom house can bought for £400k - £450k. This is clearly more expensive but above that £400k threshold in London you do appear to get alot more for your money.
To buy a flat would only be stopgap as 3-4 years down the line we would like to buy a house - this would likely be the case whether we were still together or if I was with someone else.
Given the amount of stamp duty payable on each move and hassle of moving it makes sense to go straight for a house
If we had a spare room(s) we could also make money by having a lodger and/or air bn'b if we were ever short of cash.


I think he London property market could fall in the near future and so am looking properties in areas where I would be happy to live for 5 - 10 years (i.e. we could wait for the market to recover before having to sell again) so are looking at properties in zone 4-5 that have space, have access to good schools and reasonable transport links (this is less of an issue for us)


I'm 36 now and would be happy to live in London for another 5-10 years but we'd both consider moving out eventually.


I'm trying to think of anything else I should consider. Does anybody else have any experience or this or any advice/suggestions?


Just moving house in London is a costly and time consuming experience so I need to try and plan it as carefully as possible and think about all possible issues.....


Many thanks in advance

michelle09

Remember that if your girlfriend moves in and contributes to the mortgage (or pays you anything above and beyond her share of the bills) then she could claim an interest in the property if you split anyway.

We considered doing this and I would have bought, my OH (now spouse!) would have paid half the bill but also put the equivalent of rent/mortgage money into a savings account. Then if we'd decided it was permanent we would have remortgaged with the savings and put the property into both our names.

As it was we rented for 12 months, got married and then bought. TBH if you have not lived together, I would rent first.

SuboJvR

I would also suggest renting first. It may seem a shame to not buy, but like michelle09 says if she is contributing then she may be able to claim an interest in the property later anyway.

If all goes well with the girlfriend, and you guys want to settle down, then combined you would be in a position to later buy a more expensive, bigger, nicer property.

dionysia

As well as rent and bills, what about things like redecorating, new furniture, replacing the boiler or the washing machine when they break down? It sounds like you and your girlfriend are communicating well which is great, so if you go ahead perhaps if you sit down and really go through absolutely everything related to a property that costs money and decide how you'll handle it.

buglawton

If she moves in it prevents/demotivates your GF from buying her own property. So what's so wrong with her gaining an 'interest'? Presumably you could buy that out if you ever split up. Point is, she'd no doubt be helping with all house running costs so deserves an interest.

AnotherJoe

Rent for a year then buy.

mither_2

Thanks for all of the useful suggestions.

I think we need to have a proper discussion and agree everything in advance. Whether it is renting together or my buying and she then having an option to buy a share later.

She suggested the idea of putting something in writing that she has no claim on the property which I'm fine with if she is. Not sure how best to go about this though (if we decide to go this way). We may be able to find a template document online and then amend it as required.

A family friend of hers had a partner move in and when they split she unsuccessfully tried claiming she should own part of the house and so my girlfriend is familiar with this and is willing to sign this. I don't like the idea of signing something particularly but I think it probably is necessary.

My plan would be that I pay for everything (house purchase, stamp duty, fees, decorating, furniture etc) and that on a monthly basis I pay the mortgage and she covers the running costs (council tax, utlilities broadband etc). These will come to around £200-£300 and so much less than the £700 she currently spends renting a room in a shared house.

The mortgage payments will be c£1200 - 31300 but I already pay £1000 to rent a tiny flat and so this is an improvement for both of us.

If we do decide to go down this route then the trickier part would be working out what the cost would be to buy into the property at a a later date. Does anyone have any experience of this? I think we could work something out regarding her paying me £xk for a x% share of the house i.e if the deposit is £100k she needs to pay me £50k for 50% or £25k for 25%, If the house falls in value she loses out but if it goes up then she's better off. very simplistic I know and nobody has a crystal ball telling us which way house prices will go in the next 18 months. I'm expecting them to go sideways for the north London suburbs that I'm looking at but there is always the possibility of the crash which soime have predicted for about 5 years now....

I fully understand what people have said about renting together for a year and we are still considering both options. One concern i have with this is that after a year living together buying together may still be a big move.

Thanks again all

TBagpuss

Don't panic too much about the scaremongering re: your partner gaining an interest. You can deal with that fairly simply by having a formal cohabitation agreement drawn up between you, in which you can explicitly agree that she will not acquire any interest in the property by contributing - you and she would need to come to an agreement about what it was fair for her to pay -it might be reasonable to take as a stating point what she might pay for a room in a shared house in the same arae.

You could also suggest that she set up a savigns account and pays into that the difference between her payments to you and the current rent she pays. That way, if after a year (or whatever) you and she decide that you do want to commit further and add her to the deeds,she will have built up some savings which she can either use as a lump sum to allow you to get a better deal on a joint mortgage by having a better LTV, or whatever you both feel isthe best way for her to make a capital contribution at that time.

(It would also be possible forthe two of you to have a declaration of trust drawn up at that point to set out either unequal shares in the property, or indeed to leave the property in your name but record that she has a beneficial interest, if that works better in terms o the costs of remortgaging, the deals available to you etc.

I would agree that buying together when you've never lived together is a bad idea, but provided that you plan properly and have a suitable cohabitation agreement in place there 's no reason why you shouldn't buy now, provided that you are confident that you will want the house, and be able to afford to run it, with or without her.

mither_2

Thanks for your suggestion regarding cohabitation. She actually suggested something like this when we began discussing moving in together. I think something formal in writing confirming that she has no interest just by living there would be most approriate.

We already know that a room in a shared house is c£700 per month (its not a particularly nice house that she lives in either) and so if she were to pay the council tax and utilities this would likely come to £300 - £400.


She's pretty careful with money and so I think she would save the cash she wasn't using but a savings account would be a good idea i.e. she could put aside that additional £300 - £400 every month. She's pretty good with money the reason she hasn't bought previously is that London is very expensive and she isn't well paid which makes it difficult to save (a very common problem)


Another idea I considered but haven't discussed with her would be the possibility of her buying another property to let out which, if it didn't work out between us, she could move into. This adds further complication however and so I'm less keen on it.


Your point about being able to afford the property on my own is key. I plan on taking out a fixed rate mortgage (makes sense anyway as rates are so low now) for 3-4 years and so I know exactly what the monthly cost will be.


Cheers