Buying half partners house

Bailey04

So I have lived with my partner for 9 years. We have been together nearly 15. He bought a house that I was meant to buy with him but didn’t and I moved in with him with my 2 kids. A year later I bought a buy-to-let. He earns twice as much as me. In the early days his salary was three times as much as mine. I paid him £300 rent and then we split half the bills. After around 3-4 years I paid him a straight £600 to cover bills and some rent. ( food extra on top) We never had any official agreement. This then reduced to £500 3 years ago when both my kids had moved out. The house was bought for 250k and is now worth around 340k. My partner asked if I would like to buy half. I can raise around 145k from my buy-to-let after tax. My partner thinks my buy-in should be exactly half of whatever the current value is. I know my 145K would clear the mortgage, (so we could be mortgage free) but he thinks he is entitled to more? ( he thinks I should be paying 170k for a buy-in) Can some advise me please as I feel this is a little mean. The mortgage on the property started off at 215k and I know some of what I have given him over the years will have contributed to paying this down. I think 145K is fair for a half share - my partner is not normally a mean person, but in this instance I think he is being unreasonable.

noh

This is more a relationship question rather than a financial one.

He would be correct to ask £170k if you had simply been a lodger but you are in a long term relationship and I would expect everything to be shared equally as in a marriage.

fromtheshires

There isn't a simple way around this as it comes down to individual attitudes to money etc. Buy in at current value if you have been living there and paying towards for years is a little unreasonable in my opinion. If you were to sell yours and pay off my remaining mortgage I would be more than happy so not sure why he isn't...

Both sell your individual properties and then got 50:50 on a new one. This is the cleanest way and will not lead to any resentment or bitterness in the relationship down the line.

Bailey04

fromtheshires wrote: »

There isn't a simple way around this as it comes down to individual attitudes to money etc. Buy in at current value if you have been living there and paying towards for years is a little unreasonable in my opinion. If you were to sell yours and pay off my remaining mortgage I would be more than happy so not sure why he isn't...

Both sell your individual properties and then got 50:50 on a new one. This is the cleanest way and will not lead to any resentment or bitterness in the relationship down the line.

Thanks - A lot of wasted money in moving costs - ultimately probably wouldn’t be mortgage free buying like for like - but a potential consideration

[Deleted User]

noh wrote: »

This is more a relationship question rather than a financial one.

He would be correct to ask £170k if you had simply been a lodger but you are in a long term relationship and I would expect everything to be shared equally as in a marriage.

They've been together longer than I've been married.. but the way of thinking seems very much like that of a new boyfriend and girlfriend.

There doesn't seem to be a concept of 'our money' being he sum of your stuff combined - and this money is all 'yours' irrespective of what you earn.

Surely, you'd sell off your BTL, pay off the mortgage from the other house, then consider the left over money as joint savings. Then reorganise your finances so it doesn't sound like you are a lodger 'paying rent'

TrickyDicky101

Are you giving your boyfriend any of the uplift in value of your BTL before you use the remainder to buy half of the house (giving as a genuine gift and not in exchange for something else)? Because that's effectively what you are expecting him to do with his house.

I agree that this is much more of a relationship question, but in pure economic terms I can see where he's coming from.

getmore4less

There issue here that need resolving is what beneficial interest do you have in the property?

What 1/2 the house worth now is the easy bit.

trying to extract the key information to try to establish some parameters for your beneficial interest

lived with my partner for 9 years.
We have been together nearly 15.

He bought a house that I was meant to buy with him but didn’t and I moved in with him with my 2 kids.

did you move in immediately he bought?

A year later I bought a buy-to-let.

did he contribute in any way during the ownership?

He earns twice as much as me. In the early days his salary was three times as much as mine.


I paid him £300 rent and then we split half the bills. After around 3-4 years I paid him a straight £600 to cover bills and some rent.

what were the bill coming in at was £300 still "rent"

This then reduced to £500 3 years ago when both my kids had moved out.

THe key here is how much of the mortgage would this "rent" supported.

The house was bought for 250k and is now worth around 340k. My partner asked if I would like to buy half.

1/2 the place is worth around £170k no issue there

I can raise around 145k from my buy-to-let after tax. My partner thinks my buy-in should be exactly half of whatever the current value is.

I know my 145K would clear the mortgage, (so we could be mortgage free) but he thinks he is entitled to more? ( he thinks I should be paying 170k for a buy-in) Can some advise me please as I feel this is a little mean.

The mortgage on the property started off at 215k

what was the payment?

and I know some of what I have given him over the years will have contributed to paying this down. I think 145K is fair for a half share - my partner is not normally a mean person, but in this instance I think he is being unreasonable

have you contributed to any maintenance or improvements at any time?


OK with guesses to fill the gaps,
real numbers will get more accurate
lets go with
You moved in straight away.
You paid £300pm towards the mortgage
Mortgage was £215@3% 25y, £1,000pm (9 years, now £158k)

House then £250k
house now £340k

so to get an idea of your equity.

£300pm serviced 300/1000 of £215k or £64k or 25.6% of the £250k purchase

Now that 25.6% is worth £87k leaving you £83k to buy the rest of your 1/2(£170k)


Your £87k equity still comes with 30% of the outstanding mortgage £47k

The total to buy out 50% mortgage free(for you) is £130k

(some rounding above.)


Plug in real numbers for the mortgage and a guess at your contribution to see where it comes out.



Can some advise me please as I feel this is a little mean.

IMO it but it does seem a little mean not to account for some equity how much depends on the detail if you want to do the analysis to get a range that might be "fair" what ever that really means.


if in practice you are operating as a couple on shared resource basis number crunching is probably an exercise best avoided as it looks like it go go £20k either way(depending on the real data)

Bailey04

TrickyDicky101 wrote: »

Are you giving your boyfriend any of the uplift in value of your BTL before you use the remainder to buy half of the house (giving as a genuine gift and not in exchange for something else)? Because that's effectively what you are expecting him to do with his house.

I agree that this is much more of a relationship question, but in pure economic terms I can see where he's coming from.

Everything I make in the BTL would go into the house - after paying capital gains tax - if its more than 145k - then that would go in. House not on market yet. Just an idea - as we would both gain by not having a mortgage. Thank you for your opinion. Other option, just carry on as we are. Me having to find the extra money to pay tax every year as I am trying to overpay on the mortgage - so it’s not all covered by rent. The money I give my partner helps him to overpay on his mortgage btw

Bailey04

getmore4less wrote: »

There issue here that need resolving is what beneficial interest do you have in the property?

What 1/2 the house worth now is the easy bit.

trying to extract the key information to try to establish some parameters for your beneficial interest



have you contributed to any maintenance or improvements at any time?


OK with guesses to fill the gaps,
real numbers will get more accurate
lets go with
You moved in straight away.
You paid £300pm towards the mortgage
Mortgage was £215@3% 25y, £1,000pm (9 years, now £158k)

House then £250k
house now £340k

so to get an idea of your equity.

£300pm serviced 300/1000 of £215k or £64k or 25.6% of the £250k purchase

Now that 25.6% is worth £87k leaving you £83k to buy the rest of your 1/2(£170k)


Your £87k equity still comes with 30% of the outstanding mortgage £47k

The total to buy out 50% mortgage free(for you) is £130k

(some rounding above.)


Plug in real numbers for the mortgage and a guess at your contribution to see where it comes out.



Can some advise me please as I feel this is a little mean.

IMO it but it does seem a little mean not to account for some equity how much depends on the detail if you want to do the analysis to get a range that might be "fair" what ever that really means.


if in practice you are operating as a couple on shared resource basis number crunching is probably an exercise best avoided as it looks like it go go £20k either way(depending on the real data)

Moved in straight away when bought - as we were meant to buy together - just didn’t work out like that at the time as partner wouldn’t agree to 50.50 even though I would have input 55k at time of buying - I couldn’t afford 50% mortgage - so in the end I went down BTL route
Half bills to begin with - bills always been around £300 each ( gone down a little with kids moving out)
No I haven’t contributed to maintenance

getmore4less

Bailey04 wrote: »

Moved in straight away when bought - as we were meant to buy together - just didn’t work out like that at the time as partner wouldn’t agree to 50.50 even though I would have input 55k at time of buying - I couldn’t afford 50% mortgage - so in the end I went down BTL route
Half bills to begin with - bills always been around £300 each ( gone down a little with kids moving out)
No I haven’t contributed to maintenance

He bought £250k with a £215k mortgage (£35k deposit)

If you had put in £55k you would only have been responsible for £70k of the now £160k mortgage or 43.75% to be 50:50 on ownership.

or just matched the £35k that £20k spare would have covered your 50% share(£90k) of the mortgage for some years along with what you could have afforded.


The capital appreciation on 2 houses has probably benefited in the long run.

The key to move forwards seems to be establishing a current equitable share based on a rent component of your contributions over the 9 years.