Buying out shares of a property

AdrianC

GDB2222 said:

You are effectively buying a property with a tenant aged 55 who will pay no rent for the rest of her life. That’s called a reversionary interest that you are buying. For a life tenant as young as 55**,the price paid by an investor for that would usually be around 40-50% of the house value.  But you are effectively paying 75%. 

Not even that - if the market value of the property was £120k, and a 25% share is going to be £30k, then that's 100% of market value.

And I doubt the other relatives are going to be happy with accepting £15k for their quarter of a £120k property...

Don't forget, too, that the aunt won't get HB or other benefits for a tenancy in a property that's owned by a relative, especially where she's gifted her own portion of the ownership away.

GDB2222

I’m not sure I understand your figures Adrian. The OP has already said the aunt will pay no rent.

The 75% of the house not owned by the aunt is worth £90,000, once it is vacant. Assuming the OP is prepared to raise £60,000, to pay for the 75% of the house, that means persuading the other three owners to accept £20,000 each instead of £30,000.

It’s possible that they will accept that in order to bring in some money from their inheritance and not leave the aunt homeless. Bear in mind that there’s scope for a ruinously expensive court case about this, if they try to turf the aunt out, so there’s an incentive to settle for less than the full £30,000.