My partner wants to buy half my house

Googler51

We are building a life together, decorating and other refurbishments to the house. He doesn't want to be a lodger. I understand that. We are both hesitant about marriage currently because of our divorces. Yet want to still build a life and contribute equally to a shared home together. Explaining this is really helping, thanks. 

MovingForwards

Your OH isn't a lodger.

Did you not discuss how the property value would be calculated when speaking about it 6 months ago?

https://forums.moneysavingexpert.com/discussion/6173935/advice-over-splitting-the-finances#latest

CookieMonster

Googler51 said:

The house needs further renovation ... need a new bathroom, drive, upstairs decorating....We are both in our 50s and me recently divorced, him twice, so not ready for that commitment.
I can afford the mortgage and the renovations. My savings are small. It isn't very romantic discussing this, but that is life? We are very much in love. 

It's understandable that he wants some 'part' in the house, considering the plans you have for renovations. And you may add to that list as you go forward. That's time and money needed for those; an investment on his behalf as well as on yours.
If he's renting out his house, that's a business decision. Getting involved in your house is also a business decision.
If value has increased, it's due to your buying the house in 2019. He's getting involved now, so his half should be based on the current value now. Get it valued by a couple of estate agents, average the value and lead with that. Everything is clear. (Invest the monies that he pays you - not only in the house renovations.) 
Or continue to pay the mortgage yourself, and pay for the renovations yourself (which will mean they take longer).
Love and business are very separate items.

Murphybear

Here’s what I would ask him to do, speaking as someone who had a new partner when older (we were 44/48)

I would suggest selling both properties and buying somewhere together.  If there were cash left over invest it in a pension.

I had 2 friends who did this and it worked extremely well.  They were 70+ at the time

Before anyone says what difference does age matter, I believe in this scenario it does.  I have known a few couples who have got together in their 60s and so far no acrimonious separation.  

gettingtheresometime

Lover_of_Lycra said:

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 

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. 

Well in your scenario, what happens if the partner 'buys' 50% of the OP's home making it their home and then subsequently splits up ?
OP is left with 50% of her home whilst the partner has his rental property and 50% of this property.

OP what I don't understand is why the rush. You've stated that both of you have been through divorces before so are a bit hesitant about marriage, surely this proposal should be no different? Personally unless you're prepared to lose 50% of the property value, I'd put this idea on the back burner for at least another 2 yrs

GDB2222

This doesn’t seem very romantic. The fact that you are in negotiations about this seems wrong to me. I would leave things as they are and maybe agree that he contributes a bit more to the household expenditure. 

You have not been together long and neither of you want to marry, so it’s crazy to intertwine your finances by jointly owning property. It will just make things worse if you split up. If you are still together in five years time, you should consider this again. 

Incidentally, is he offering you the chance to buy into his rental property?  This all seems a little bit one sided to me. 

eve824

Could you value both properties, and then arrange it so that he buys 50% of your house and you buy 50% of the rental? Then you benefit from a portion of the rental income and you are both on an even footing.

gingercordial

Googler51 said:

We are both in our 50s and me recently divorced, him twice, so not ready for that commitment. 

I know you didn't post here for relationship advice - although the question of what the value should be is mainly one about negotiation and compromise in a relationship, not property values as such - but I will say this: owning a house together is at least as much commitment as marriage.  If you split up, you will be left fighting, and potentially needing a very expensive court battle, about the roof over your head.  You could end up being forced to sell so he can have his money back, with all the equity swallowed up in legal fees and you left with nothing.  Personally I would not risk that with someone I wasn't also prepared to get married to (and I speak as a divorcee too).  So, what's the rush?  Hold off for now, grow your relationship, and perhaps revisit this - and the marriage question - in a year or two.

princeofpounds

gettingtheresometime said:

....OP is left with 50% of her home whilst the partner has his rental property and 50% of this property......

..... Personally unless you're prepared to lose 50% of the property value, I'd put this idea on the back burner for at least another 2 yrs....

This viewpoint does not make a great deal of sense. The OP already only owns a 50% (or similar) equity interest in their own home. The bank has a charge that covers the rest of the equity - that is what the partner would be buying out, not reducing the OP's effective equity stake, which will remain unchanged. Nobody is losing 50% of the property value! You don't lose things by selling them, you get something of equal value in return.

The only thing that the OP would lose is the ability to gain from house price appreciation in excess of the cost of debt on that portion of house equity that they have mortgaged to buy. If that is so critical (And it is never a given), that could be largely offset by investing in property funds or property with money saved from not having to pay a mortgage, and/or borrowing more money.

princeofpounds

gingercordial said:- but I will say this: owning a house together is at least as much commitment as marriage.  

This is very true, although the scale is limited to the house rather than all the assets that would be involved in a marriage. But the house is often the biggest.