How to work out deposit on house purchase

Deniseconfused

My son and his partner want to buy a house. 

Im giving my son £50,000 for his deposit. His partner has £3,000.

The costs to buy will be shared equally from other monies. 

They are looking at £400,000 house
Gay and no planned children. 

Obviously I want to ring fence the respective deposits 
However the mortgage to be paid 50/50 and they both get 50/50 of the equity once they get their deposits back

I cant for the life of me work out how to do it. Would I work out the deposits as a percentage of the initial purchase price, and they each get back their share, then split the equity equally ? 

Any help appreciated for my frazzled brain 😂

user1977

Deniseconfused said:

Obviously I want to ring fence the respective deposits 

You can't - it's up to them whether, and how, they do that.

lika_86

If it's a gift to your son then it's a gift and for him to protect as he wishes.

Deniseconfused

When I say ring fence - obviously not for me - its a gift - ring fenced for him 
my son is autistic and looks to me to advise him 

Bigphil1474

Are you saying they are buying a house for £400k and between them they have £53k deposit, your son putting £50k of that in. The solicitors fees for buying etc. will be split 50/50 and once they own the house they will pay 50/50 of the costs of living there?

If so, your son should retain 12.5% of the property (50k/400k) and his partner would retain 0.75% (3k/400k) before equity split of  50/50. That way both of their deposits would increase in value as the house increases in value. Your solicitor should be able to draw this up as part of the purchase. Bear in mind any wishes he might have in terms of inheritance - he should have it written out in a will. 

The partner could have the opportunity at some future point to balance up the deposit payments, or even contribute more to the mortgage payments to offset the difference. Personally, I'd just stick to the numbers above.

Martico

Bigphil's reply is good, and probably more elegant / easier to work out than mine, which comes to the same result: if the house price has risen or fallen by x% on sale, increase or reduce each initial deposit by x%.
Example sale of 440,000 (price has risen by 10%): son gets 55,000, partner gets 3,300, rest is split 50:50.

Deniseconfused

Brilliant ! Thank you both 👍🏼
it makes so much sense as you wrote it as for some reason I had a mental block over it 😳