Adding son as joint owner in a property and him taking on remainder of mortgage

Newbie_John

Why not just rent your son the property? Ask him to pay monthly fee to a saving account and in few years time he would have some "equity" (accessible large amount of money for future deposits etc.), he will save all his first time buyer allowances, you don't need to change mortgages, and if he wants out he can do that easily?

theoretica

You are basically proposing to give your son £10k - the value of half the property, less the mortgage.  For that you will need to pay CGT on the increase in value of the half property since you bought it.  He will lose all first time buyer privileges, the flexibility to move following a job or partner that renting gives, and maybe feel tied to a property he would not choose.  For me, this would not be worth it.  I would urge you to suggest that he gets separate advice - perhaps even here- before deciding whether it would be sensible for him to take you up on this offer.

13Kent

Thanks for your replies. He has decided to rent it from us for a while and see if he likes it there and if he does he is going to consider buying it himself. He's just had a new job which would make him able to buy the house himself, but he'll need to be in the job for a while before he can apply for a mortgage. 

MWT

13Kent said:

Thanks for your replies. He has decided to rent it from us for a while and see if he likes it there and if he does he is going to consider buying it himself. He's just had a new job which would make him able to buy the house himself, but he'll need to be in the job for a while before he can apply for a mortgage. 

Sensible to keep it simple, so you are changing the mortgage from your current BTL ?

13Kent

MWT said:

13Kent said:

Thanks for your replies. He has decided to rent it from us for a while and see if he likes it there and if he does he is going to consider buying it himself. He's just had a new job which would make him able to buy the house himself, but he'll need to be in the job for a while before he can apply for a mortgage. 

Sensible to keep it simple, so you are changing the mortgage from your current BTL ?

I don't know if we can as we won't be living in it, I assume it will have to stay on BTL

silvercar

13Kent said:

MWT said:

13Kent said:

Thanks for your replies. He has decided to rent it from us for a while and see if he likes it there and if he does he is going to consider buying it himself. He's just had a new job which would make him able to buy the house himself, but he'll need to be in the job for a while before he can apply for a mortgage. 

Sensible to keep it simple, so you are changing the mortgage from your current BTL ?

I don't know if we can as we won't be living in it, I assume it will have to stay on BTL

You can’t let to close family member on a standard BTL mortgage. Not sure how crucial this is as, if the lender notified you that you were breaching their terms, your son could move out or you could change the mortgage. 

13Kent

Thanks to those that commented, son is moving in and renting from us with a letting agreement in place with a view to purchasing if he decides he likes living there. Have checked with both mortgage company and insurance to make sure we are not breaking any of the rules and are covered.