Shared Ownership From a Family member?

Catmaspudding

I am currently living in a house belonging to my Nan with another family member. The other family member is moving to a care home and my Nan would like to sell the house.

I am not being pressured to move asap, but I feel guilty that she needs the money,

I have the added complication that I rent in London during the week because its actually cheaper than the commute ~£450/m.

I was looking at 'help to buy' properties as Nan could lend me the deposit once the house is sold. I have found a nice studio for £180k (the max I can borrow on a 30k wage).

However I wanted to consider another option, especially as I want a place for my brother to live. My Nan's house is a three bedroom in High Wycombe. I don't drive so my main issue is having to taxi to the train station and the cost of the train. Its is an ex-council house and needs renovation (another cost). I need to get it valued properly, however I would guess at £250k.

Obviously if it was only worth £180k I could afford to buy it outright, but I have to consider the high cost of transport - I probably can't afford the £450 on top of the mortgage/bills etc.

I was wondering if it was possible to buy a 'share' of my Nan's house and maybe pay rent until I buy the rest - literally a shared ownership from my Nan? I could increase this as my wage increases and my Nan would still get a lump sum.

I might end up living there for another year whilst everything gets sorted anyway, and this way I end up on the property ladder with a 3 bed house instead of a tiny studio in a rough part of London. I would still be renting a Mon-Fri in London as its cheaper and saves me so much time (might get a housemate as I am away anyway).

kingstreet

No. You can't buy shares in a property owned by an individual. A mortgage is secured over the whole property, not just a bit of it.

Shared ownership works because a Registered Social Landlord is able to sell a leasehold interest in a property which a mortgage lender can sell on, or staircase to full ownership in the event of repossession.

Catmaspudding

Thanks for the clear explanation

It would be good to see what the property is valued at. If is isn't too much more than 180k then I could consider a joint mortgage with my Nan as she would own a percentage of the property that way? It could honestly be valued anywhere between 180k-300k given its condition. Is this possible?

The three bed house is in an awkward location for me, but 180k seems a lot for a studio (it is in Croydon). Going forward, does anyone have any advice on which would be a better investment? I don't intend on living in either forever.

I am also considering that my brother could move in when he finishes his degree, and probably my bf, but it can't be my deciding factor.

sparkey1

Depending upon your Nans age. Lenders wont lend above certain ages. You would have to check with individual lenders.

In the back of my mind that might be complications if Nan goes into a retirement home.

Potential to get messy here!

Catmaspudding

Also just realised that I probably can't use a 'help to buy' scheme to buy my Nan's home... so I can only afford 130k...

Catmaspudding

Ive just read that a joint mortgage doesn't do quite what I wanted, but there is a way round it. You can do something to say that if it is sold, my nan's share would go back to her.

I was thinking (for example)

Value = 200k
My Mortgage = 180k
Nan's contribution = 20k

I don't want my Nan to take out a mortgage at all - just top up my contribution and have a more secure way of getting it back. I don't want her liable for missed payments etc.

(Contrary to the above poster I am not forcing my Nan to do anything - I am at the early research stages and she will want draft budgets for every potential option. She isn't keen on me getting a flat because of maintenance fees etc )

kingstreet

You need to get professional broker advice because you are trying to bend your round peg plan into the square hole of specific schemes.

You need to put your circumstances to an experienced broker and have them come up with the potential solutions.

Catmaspudding

Thanks anyway

The prices in London are just insane - I thought my wage (admittedly for my first ever job) sounded quite good until I started looking for a flat!