Tenants in Common

xylophone

It's not really ignoring my wishes...I don't mind living in London (I'm sure nobody would hate that) but him and his family were adamant we had to be here, whereas I wouldn't mind where I go as long as I get my own space. 

You are having to make all the compromises because you are under pressure from your would be co purchaser and his family?

You do not in your heart want to embark on a renovation and restoration project?

You aren't really very keen on London?

Natbag

You need to draw up a Declaration/Deed of Trust. If you're in agreement, it's about £180 all in. Otherwise you can mediate through a solicitor each, but the quote we had was for upwards of £1,200. We are protecting our initial deposit, and as we are paying the mortgage and bills equally and both putting into improving the property, any equity will be 50/50. Will you be helping physically or finanacially with the renovating, decorating, accessorising, furnishing, etc? Will there be a time where if you have children that you might not contribute half of the mortgage and bills, if you're on maternity pay? You need to both consider what's fair in all possible scenarios, and if he refuses to budge you might need to consider whether it's worth pursuing. Don't settle, and don't set yourself to come out worse off than you should be.

gettingtheresometime

Suggest to him that you keep to the plan re the deposit split but that renovations will only take place as and when you can afford to contribute 50% each.
Who is expected to supervise the trades people?

firsttimebuyerlondon01

gettingtheresometime said:

Suggest to him that you keep to the plan re the deposit split but that renovations will only take place as and when you can afford to contribute 50% each.
Who is expected to supervise the trades people?

Unfortunately the property needs a new kitchen & bathroom to be habitable (london prices )
Otherwise I'll just keep living at his parents forever haha

FTB_Help

He is being unreasonable.

What is his suggestion then should you split?

Also note, he is not able to purchase this place without your income too.

Its definitely the right thing to do to secure your deposits and financial input in renovations.

Right now, do you think you both could hold off for a little longer before buying, it sounds like you're not quite on the same page, so don't rush in.

The idea of your own space might be really appealing as you've just spent the last yr couped up with his family, in the next few months it will be a little different especially as we slowly start going back in the office and shops opening up again.

getmore4less

firsttimebuyerlondon01 said:

Hi All, 
Please can I have your advice? 
Me and my partner are looking to buy a house of £425,000 in London. 
The plan is that he will put down £33,000 and I will put down £9,000 for the deposit. We then have to do renovations of up to £25,000 to the property that he will pay for. By doing the renovations we aim to increase the value of the house to £525,000.
We plan to both split the mortgage repayments 50/50 each month which is £1,600 a month between us and split bills, council tax etc.
My plan would be if we broke up that I could take out my £9,000. He could then take out his £33,000 + £25,000 for renovations and then we would split the rest 50/50. 
He thinks this is unfair as without his money for the renovations, the property would not increase in value and I would make money off the renovations. However I think that only him making money of the renovations is unfair because I would be spending a lot of time liaising with the contractors and builders and making the house nice. Similarly, he couldn't afford the house without my income  but I wouldn't try to penalise him for this! And I am still stretching myself to pay 50/50 a month on mortgage repayments.

Like many people in these circumstances, I find it very upsetting as I work really hard for my money (I have saved the deposit money in 2 years of working full time and finishing my Masters degree). I am not interested in getting any of his money, I just dont want to be left in the lurch if we break up. I am 24 years old and have only been working for 2 years whilst paying large amounts in rents while saving, whereas he is 28 and has saved up his deposit from living at home and being rent free.

If I had my way, we wouldnt be living in London and we wouldn't be buying a house that needs so many renovations done!
Can anyone instruct me about whether I am being unreasonable or not?

What you are asking him to do is give you an interest free loan of (33+25-9)/2= £24,500
that's how get you money back works.

the other usual way is to split based on inputs.
if we assume that the renovations are to be done relatively soon then we can count that £25k  as a purchase cost
(don't forget to put in all the others who is paying for them?)
you add what you pay of the costs to but to your £9k,  he does the same for h

you are in effect buying in the following %  but owe 1/2 the mortgage from that,  you can negotiate the value of your  time if that is going to be extra

you (£9k + £191,500)/£450k   =  44.56%
him (£58k  + £191,500)/£450k  = 55.44%

so if the place gets to £525  don't count the mortgage bit yet.
with get the deposit back 
you (£9k + £229k - £191,500 = £46,500  up £37,500
him (£58k + £229k - £191,500  = £95,500  up £37,500

Equitable shares less 1/2 the mortgage each
you £42,440  up £33,440
him £99,560  up £41,560

That's how  it work out at when he buys 12.89% of the house for the cash and you only buy 2%  and you share the other  85.11% 1/2 each



If he is trying to say that all the increase should be his then he will need educating on what is a fair split.

In practice he is just increasing his deposit.

Falafels

The way you propose sounds fair to me, and I'm pretty sure would to most people.

The equity split is something which is only relevant if/when you split up. The fact that he's so concerned that you personally might 'make money from the renovations', when you haven't even bought the property yet, would be sounding huge alarm bells for me - especially as you're already stretching yourself to buy the house in the first place. This does not sound like a partner who will be loving and sharing in the face of life's vicissitudes.

The other consideration is that there's no guarantee at all that the house would be worth £525,000 after renovations; just that it might be easier to sell. And, as per the equity split, the value of the house is only relevant if you need to sell it.

Sure, there are stresses when buying a property together; there are some stresses which are an inevitable part of the process and you'll totally forget about them once you move in.

However, the kind of stress you're describing here is NOT a standard one. It's great if couples are 'in it together' and there's give and take on both sides. That doesn't seem to be happening here; it's you making all the compromises. His attitude here is saying something quite profound about who he is and how he operates, and it's likely to come back and bite you on the ***.

[Deleted User]

Falafels said:

The way you propose sounds fair to me, and I'm pretty sure would to most people.

The equity split is something which is only relevant if/when you split up. The fact that he's so concerned that you personally might 'make money from the renovations', when you haven't even bought the property yet, would be sounding huge alarm bells for me - especially as you're already stretching yourself to buy the house in the first place. This does not sound like a partner who will be loving and sharing in the face of life's vicissitudes.

The other consideration is that there's no guarantee at all that the house would be worth £525,000 after renovations; just that it might be easier to sell. And, as per the equity split, the value of the house is only relevant if you need to sell it.

Sure, there are stresses when buying a property together; there are some stresses which are an inevitable part of the process and you'll totally forget about them once you move in.

However, the kind of stress you're describing here is NOT a standard one. It's great if couples are 'in it together' and there's give and take on both sides. That doesn't seem to be happening here; it's you making all the compromises. His attitude here is saying something quite profound about who he is and how he operates, and it's likely to come back and bite you on the ***.

This, 100%. It's a shame you are even questioning whether YOU are being unreasonable when it is clear to me that he is. This isn't necessarily a comment on your relationship specifically, but I would hope that, as you are making such a big move, a loving, supportive partner would not be focused on the additional profit he could make in the eventuality of a breakup. Rather, this is an exciting move for you both and you're in it together, through the highs and lows. Yes, there may be some squabbles and differences when you're moving in together, but based on what you've said, I think this goes beyond that. Surely supporting each other and having a harmonious relationship is more important than profit.

Falafels

Deleted_User said:

Falafels said:

The way you propose sounds fair to me, and I'm pretty sure would to most people.

The equity split is something which is only relevant if/when you split up. The fact that he's so concerned that you personally might 'make money from the renovations', when you haven't even bought the property yet, would be sounding huge alarm bells for me - especially as you're already stretching yourself to buy the house in the first place. This does not sound like a partner who will be loving and sharing in the face of life's vicissitudes.

The other consideration is that there's no guarantee at all that the house would be worth £525,000 after renovations; just that it might be easier to sell. And, as per the equity split, the value of the house is only relevant if you need to sell it.

Sure, there are stresses when buying a property together; there are some stresses which are an inevitable part of the process and you'll totally forget about them once you move in.

However, the kind of stress you're describing here is NOT a standard one. It's great if couples are 'in it together' and there's give and take on both sides. That doesn't seem to be happening here; it's you making all the compromises. His attitude here is saying something quite profound about who he is and how he operates, and it's likely to come back and bite you on the ***.

This, 100%. It's a shame you are even questioning whether YOU are being unreasonable when it is clear to me that he is. This isn't necessarily a comment on your relationship specifically, but I would hope that, as you are making such a big move, a loving, supportive partner would not be focused on the additional profit he could make in the eventuality of a breakup. Rather, this is an exciting move for you both and you're in it together, through the highs and lows. Yes, there may be some squabbles and differences when you're moving in together, but based on what you've said, I think this goes beyond that. Surely supporting each other and having a harmonious relationship is more important than profit.

YES, exactly!

saajan_12

firsttimebuyerlondon01 said:

Hi All, 
Please can I have your advice? 
Me and my partner are looking to buy a house of £425,000 in London. 
The plan is that he will put down £33,000 and I will put down £9,000 for the deposit. We then have to do renovations of up to £25,000 to the property that he will pay for. By doing the renovations we aim to increase the value of the house to £525,000. - what are you basing this on? You're getting a mortgage, so the lack of renovations don't make it unmortgageable. So why do you / he think 25k of renovations would add 100k of value? Particularly because some of the finishing touches would be personal choice so usually doing work adds less value, not more than the cost. 
We plan to both split the mortgage repayments 50/50 each month which is £1,600 a month between us and split bills, council tax etc. 
My plan would be if we broke up that I could take out my £9,000. He could then take out his £33,000 + £25,000 for renovations and then we would split the rest 50/50. - Any reason why this would be fixed £ values, not a % of the value? 
He thinks this is unfair as without his money for the renovations, the property would not increase in value and I would make money off the renovations. However I think that only him making money of the renovations is unfair because I would be spending a lot of time liaising with the contractors and builders and making the house nice. - this is really a decision for you both, on how you want to split the extreme increase in value from a smaller cash injection. Presumably some of that extra 75k gain is due to the hassle, so the time you spend should be worth something. Would you be taking the lead on that, or splitting 50/50?

Similarly, he couldn't afford the house without my income  but I wouldn't try to penalise him for this! And I am still stretching myself to pay 50/50 a month on mortgage repayments. - its not necessarily a penalty, if his cash upfront is entirely why you can gain 75k instantly, then he's not unreasonable. The point is the cash upfront isn't entirely why.. there's also the renovation project management etc. 

Like many people in these circumstances, I find it very upsetting as I work really hard for my money (I have saved the deposit money in 2 years of working full time and finishing my Masters degree). I am not interested in getting any of his money, I just dont want to be left in the lurch if we break up. I am 24 years old and have only been working for 2 years whilst paying large amounts in rents while saving, whereas he is 28 and has saved up his deposit from living at home and being rent free. - I understand how you feel, but you both come into this accepting what you have. The same way that his extra deposit money, however he got it, is his. 

If I had my way, we wouldnt be living in London and we wouldn't be buying a house that needs so many renovations done! - if this is important to you, then push back and find somewhere you're happy with too. Or maybe decide to be un involved, let him do all the work and keep all the gain. Think of it as you getting the ready made property you wanted, which also wouldn't gain so much (I know this isn't always realistic, depending on what the work is)
Can anyone instruct me about whether I am being unreasonable or not?

Its really up to you on how to split the gain from renovations. I agree with you, that its not only the 25k cash, but also the time & hassle in managing it that causes the increase in value. Other issue with agreeing to allocate partner the 100k of benefit is that gain is very approximate, difficult to get a correct valuation. 

I would suggest allocating the deposit values as % of the current value, instead of fixed numbers. That way if the house price doubles, partner makes a proportionate gain as he has more invested which isn't earning interest etc. If house prices fall, you're not left owning loads while partner is sitting pretty with a ring fenced deposit. That approach isn't to favour either one of you in particular, but feels fairer.