Selling half of property to move & let

Brilism

Hello all, I appreciate this is going to be an unusual scenario and I intend to seek legal advice, however wanted to ask here first in case there was a glaringly obvious reason why it wouldn't work and I'd of saved myself the time of seeing a solicitor.

I own a property currently worth £200k. It would be an ideal rental property, however I need to release some equity to buy a house with my partner. I currently owe £135k on the mortgage.

My father (55) is looking to buy a property for himself, and is currently renting. He cannot find anything suitable for his needs. I'm aware of possible mortgage issues due to his age.

The plan, if possible, is to sell 50% of the property to my father at £100k and the two of us would then let it out to tenants. I will buy another property with my partner and he will continue to rent having a share on the property ladder elsewhere.

I am struggling to come to terms with how this could happen and I could release the required equity I need to move. Is it even possible? How much equity could I potentially access? And how?

Like I say, I will seek legal advice if this forum indicates that it may be possible. I've done plenty of googling and cannot find this set of circumstances anywhere. Thank you in advance to anyone who offers help or advice.

anselld

You cannot release more equity than you have, ie £65k max.
The best way to release that is to sell the whole property.

If you retain, sell half to your father, presumably remortgage btl...
Pay off existing mortgage. -£135k
Sell half to father +£100k
Remortgage remaining half 75% LTV. +£75k
... meaning you have released £40k (ignoring fees)

However you have also left yourself liable for SDLT surcharge on your new property.

davidmcn

anselld wrote: »

Sell half to father +£100k
Remortgage remaining half 75% LTV. +£75k

And it still leaves the age-related mortgage issues for dad, as that would need to be a joint mortgage with the OP.