Stopped from being a first-time buyer

Chloekins

Hi all,

My Husband and I are looking to buy our first house together and neither of us have ever bought a property. My Mum jointly owned my Grandads house (with her sister), which they rented out. However 8 years ago she split her 50% share between my Brother and I and put 25% in each of our names. On paper the house is now owned 50% by my Aunt, 25% by my Brother and 25% by myself. The house is still Let out, but both my Mum and my Aunt take the rent 50/50. So I have had no financial gain for the past 8 years.

Little did we know back then that this would cost me dearly when it came to buying our first house. I now no longer qualify for any first time buyer schemes or mortgages. Financially it would take us around 5-8 years to save the funds we need to put down as a deposit. Does anyone know of a way we could get round this? It looks like I am completely ruled out as a FTB?! Could I borrow against my Grandads house in some way in order to raise the deposit for our first home? I should also mention, my parents and my Aunt do not want to sell the property for the foreseeable future. They want to keep the asset.

Any thoughts are greatly appreciated.

Thanks!

Comms69

Chloekins wrote: »

Hi all,

My Husband and I are looking to buy our first house together and neither of us have ever bought a property. My Mum jointly owned my Grandads house (with her sister), which they rented out. However 8 years ago she split her 50% share between my Brother and I and put 25% in each of our names. On paper the house is now owned 50% by my Aunt, 25% by my Brother and 25% by myself. The house is still Let out, but both my Mum and my Aunt take the rent 50/50. So I have had no financial gain for the past 8 years. - That is 1: not possible. and 2: very dangerous. You're involved in tax evasion...

Little did we know back then that this would cost me dearly when it came to buying our first house. - presumably you were an adult (you have to be in this country, to own land) - so why did you not seek professional advice I now no longer qualify for any first time buyer schemes or mortgages. Financially it would take us around 5-8 years to save the funds we need to put down as a deposit. Does anyone know of a way we could get round this? - By selling your share of the property you own? It looks like I am completely ruled out as a FTB?! Could I borrow against my Grandads house in some way in order to raise the deposit for our first home? I should also mention, my parents and my Aunt do not want to sell the property for the foreseeable future. They want to keep the asset. - Then they should buy you out. As a tenant in common you are entitled to liquidate your assets

Any thoughts are greatly appreciated.

Thanks!

Make sure you consider the implications of your decisions in the future

sal_III

The main disadvantage of not begin a FTB is the higher SDLT. I really can't understand how it will take you 5-8 years additional savings to compensate for this...

If your relatives don't want to sell the property you co-own - ask them to buy you out

Pixie5740

Was this a DIY job by any chance? Was there ever a Deed of Trust drawn up because there's a big difference between being a legal owner and a beneficial owner of a property. If you're just a legal owner then you could still qualify for some FTB benefits but not if you're a beneficial owner.

csgohan4

Another case where money and family shouldn't mix

Even though you own 25%, do you not have to declare your portion of rent you should be receiving? Even though you don't get it?

Tom99

[FONT=Verdana, sans-serif]Do you know what your mother thought she was achieving by transferring the property to you but keeping all the rental income? Was this discussed at the time and did you agree to your mother keeping all the income? If so you may have a case that you are one of the legal owners but you do not have a beneficial ownership therefore you can still be a FTB for stamp duty purposes.[/FONT]
[FONT=Verdana, sans-serif]You would have to convince your solicitor about that since they will be responsible for the SDLT return.[/FONT]

SDLT_Geek

Tom99 wrote: »

[FONT=Verdana, sans-serif]You would have to convince your solicitor about that since they will be responsible for the SDLT return.[/FONT]

It is the buyer who is primarily responsible for their own return, though a solicitor should refuse to file a return the solicitor knows to be wrong.

ACG

The only difference between where you are now and where you would be had you not owned part of your grandfathers house is stamp duty and no access to the HTB ISA but if you are struggling to save a deposit anyway then this would only offer limited help.

You can still get away with a 5% deposit.

As suggested you could sell your 25% share, chances are that will give you far more than the stamp duty.

Tom99

SDLT_Geek wrote: »

It is the buyer who is primarily responsible for their own return, though a solicitor should refuse to file a return the solicitor knows to be wrong.

Yes you are right but I was thinking that the mortgage co might insist that their solicitor (ie yours) files the return to make sure it is properly submitted.

chanz4

AML sounds to me, who does the tax returns. Once the sols find out about this they are obliged to flag

poppy10_2

Chloekins wrote: »

On paper the house is now owned 50% by my Aunt, 25% by my Brother and 25% by myself. The house is still Let out, but both my Mum and my Aunt take the rent 50/50.

Your mum no longer owns any of the house. You should get the rental income.