Source of Deposit

ACG

You have transferred the deposit to him, but he has reduced the rent. 
Are you sure this is not a gifted deposit? 

Apollo81

@ACG how so? Our £21200 has come from our own money over the past 12 months. Therefore not a gift? Apologies if I am being niave. The rental decrease didn’t effect this.

kingstreet

I can honestly say in 38 years of doing this I've never comes across anything similar. It will be interesting to see how it pans out.

ACG

Apollo81 said:

@ACG how so? Our £21200 has come from our own money over the past 12 months. Therefore not a gift? Apologies if I am being niave. The rental decrease didn’t effect this.

You have said he has reduced your rent accordingly. 

Lets say your rent is £1,000 per month. The agreement was to get £10k saved up. 
If every month you transfer £1,000 but £500 is going into a "deposit fund", that means it could be deemed as a gifted deposit as your rent was a grand. The landlord has put half of that into a pot and deducted it from the purchase price. 

It is a very odd way to do things and in my experience if something is odd, it will mean people have to put in more effort to make it work. 

Apollo81

@ACG

it’s nothing that extreme, it’s like this. Should also add that we pay the rental rate each month. It’s just the deposit amount that reduced it slightly.

user1977

K_S said:

As long as your conveyancer (hopefully the same firm that has set up this arrangement) 

Think it's the landlord's solicitor who has set it up, so hopefully the OP is not using the same firm!

K_S

user1977 said:

K_S said:

As long as your conveyancer (hopefully the same firm that has set up this arrangement) 

Think it's the landlord's solicitor who has set it up, so hopefully the OP is not using the same firm!

If that is the case then absolutely!

Sistergold

ACG said:

You have transferred the deposit to him, but he has reduced the rent. 
Are you sure this is not a gifted deposit? 

The landlord only reduced rent by the interest they agreed on so it’s almost like the landlord had “borrowed the money”. In this case they did it to show commitment but so that OP will not lose on interest so it was deducted from rent. So OP MONEY STAYED THE SAME any possible interest was paid back to op as rent reduction. So if rent was £200 and interest earned was £20 they paid £180. This was so that the OP’s money is not sitting with landlord doing/earning nothing. That’s my understanding of the arrangement. 

Apollo81

Thank you @Sistergold . Basically that’s the arrangement. We also have a signed option to buy agreement which details this. So deposit payments have been separate to rent payments. 

Apollo81

Hi all. Update on this. Lender is happy as we could provide an audit trail, and letter from landlord. Offer received yesterday.