My partner wants to buy half my house

MFWannabe

Googler51 said:

I bought my house 18 months ago. My partner moved in 6 months later. We have lived together for 12 months and shared the bills, but I have paid the small mortgage and he had rented out his bought house. No mortgage on his house. We are both in our 50s. Therefore he has made money from the rent of his house whilst living here.
He wants to buy half my house, which will then pay off the mortgage, at the original purchase price. I've paid over £5000 in mortgage payments and made improvements to it using the insurance money after it was flooded. As he has lived here for 12 months and helped with decorating, suffered as a result of the flooding etc. he feels it should be at the purchase price. I don't agree. What do you think?

Is it more of a question if you want him to own half your house? 

He gains significantly by buying half your house as he also owns a house, so is he going to give you half that house and the rent? 

Yes you would benefit by the mortgage being paid off and the interest saved but you’d only own half a house. 

In your shoes I wouldn’t want to do it. Recently divorced and not ready for marriage commitment; houses are the same commitment imho. This forum is full of couples who have split up after buying property 

Personally I would stay as you are until in a few years time when you’ve been living together longer and are sure you’ll last and then look at everything as a whole package 

Googler51

I care what 'a bunch of irrelevant strangers' think because they are perspectives from lived experiences. They could help with my own decision making because they provide angles not considered and are why forums exist.  I'd like a profession opinion, but is that a solicitor, which I'd have to find anyway, or a financial advisor or other? I'll start looking into that today.

Googler51

I'm not sure why selling this house and buying another together is any different? I still own half a house. 

DCFC79

Googler51 said:

I'm not sure why selling this house and buying another together is any different? I still own half a house. 

Yes you would but there wouldn't be a disagreement as to what price the percentage he buys is based on.

[Deleted User]

MFWannabe said:

Googler51 said:

I bought my house 18 months ago. My partner moved in 6 months later. We have lived together for 12 months and shared the bills, but I have paid the small mortgage and he had rented out his bought house. No mortgage on his house. We are both in our 50s. Therefore he has made money from the rent of his house whilst living here.
He wants to buy half my house, which will then pay off the mortgage, at the original purchase price. I've paid over £5000 in mortgage payments and made improvements to it using the insurance money after it was flooded. As he has lived here for 12 months and helped with decorating, suffered as a result of the flooding etc. he feels it should be at the purchase price. I don't agree. What do you think?

Is it more of a question if you want him to own half your house? 

He gains significantly by buying half your house as he also owns a house, so is he going to give you half that house and the rent? 

Yes you would benefit by the mortgage being paid off and the interest saved but you’d only own half a house. 

In your shoes I wouldn’t want to do it. Recently divorced and not ready for marriage commitment; houses are the same commitment imho. This forum is full of couples who have split up after buying property 

Personally I would stay as you are until in a few years time when you’ve been living together longer and are sure you’ll last and then look at everything as a whole package 

Why would he give the op half the rental property and its income if he bought half the op’s house? That makes no sense. 

I don’t see how the op would be worse off. The op currently has about 50% equity and a mortgage. The mortgage would be gone and the op would still have 50% equity except now the money that was been spent repaying the mortgage could be invested. 

princeofpounds

It's not that complicated. The house is worth what the house is worth. IF he buys 50% of the house, he should pay 50% of the worth. Despite the relationship, this would be an arm's-length transaction.

- The fact that you have paid down the mortgage is irrelevant. It doesn't change how much the house is worth.
- The fact that you have done minor improvements is largely irrelevant. It barely changes how much the house is worth.
- The fact that he owns another property is irrelevant. I can't believe people are talking about it being unfair that he owns more property than you. It's because he is wealthier than you, and you aren't married yet. Would those people be complaining if he sold that rental property and held the cash instead? It would be an entirely different matter if you were sharing, giving him property, but in this case he would be purchasing it, so you receive something of equal value, which is an entirely fair transaction.

- The fact that you have had flooding is relevant. It may have reduced how much the house is worth, if this was a risk that was unknown before, but is now known.
- The fact that you have owned the property for 18 months is relevant. House prices have moved up by about 5%yoy, a bit more over 18 months I presume, although this varies significantly from region to region and type to type. That is a material change. If it were 1, 2 or 3% I'd probably say just let it go, it's within the margin of error. But that's not the case at this time, unless the flooding is an issue.

So how to establish the value of the property? Various ways are possible, and you will never get a precise answer. You both need to be happy how you do it, that is the key.

- Purchase price. It's out of date, but the flooding may offset the house price inflation, and so it may not be inappropriate.
- Purchase price inflated by a suitable house price index to account for inflation in the meantime.
- Valuation by 2/3 estate agents. They tend to overvalue to win instruction, so ask them a realistic price for a quick sale.
- Valuation by a RICS surveyor. The most independent method, but will cost you some money. Has the big advantage of stopping arguments. Your partner could offer to pay this (after all, he would likely get any new property purchase surveyed... but you don't need to pay for the building survey of course, just valuation which is much cheaper.)

None of this is to comment on the wisdom of selling half your home to an unmarried partner. Sometimes that's appropriate and sometimes not, you are in the best position to judge ultimately.

Davesnave

Like another poster here, I'm not convinced the value of a recently flooded house will have increased, no matter how desirable the village.

princeofpounds

Davesnave said:

 Is it only me who's not convinced the value of a recently flooded house will have increased, no matter how desirable the village?

I agree, IF the flood risk issue is new. But it may well not be.

Marvel1

He has his own house, why buy half of yours?

princeofpounds

Marvel1 said:

He has his own house, why buy half of yours?

Because he wants right of occupation in his current primary home?

Because the OP is currently paying a mortgage, which he is not contributing to, and if he were to contribute he may establish a beneficial interest in the home anyway. So owning half of it would make crystal clear any murky issues around beneficial interests, and enable the OP to save money in a similar matter to how he is able to at the moment?

These are perfectly good potential reasons.

There may also be reasons it's not such a good idea. The main one being what happens to the property if they break up. This could be addressed with a deed between the two of them that, for example, gives the OP a stated right to an option to buy the partner's half of the property subject to an independent valuation and legal costs.