Partner buying into my house, good move?

LEESAV

Opinions please...

I own my own property (worth around £200k) with a mortgage of £23k

My partner wants to get on the property ladder and we have discussed her buying into my house. When I saw a financial advisor around a year ago he advised against it saying my money was best kept in my house as it would earn more than a good savings account.

I asked if my partner would be better off buying a cheap house and renting - also advised against it saying the renting boom was over, sounded like a no win for both options!

Anyway, now the housing market is predicted to slow down or even go backwards slightly, it may be a good time for ME (I know this sounds selfish!) to let my partner buy into the house 50%, I pay off my mortgage, spend £25k on house improvements leaving £52k + what I can save each month into a good savings account, see how things go for a year or so then think about getting a higher value house together.

Don't want to go for the higher value house just yet as I need to know my partner can manage her money and cope with the mortgage, need to ensure I can 'buy her out' if anything goes wrong!

Sorry for the long post, just in a bit of a dilema, don't want either of us to lose out whatever decision we take...thanks in advance for your comments!!

Doozergirl

You need to know she can afford to pay most of your new mortgage on your own home before you take out a bigger one?

Fair enough, people need to see if their potential life partners are trustworthy, but I wouldn't practice on your nest egg. Just move her in, ask her to contribute towards the bills and do it that way. And then, when you work out that what is a good thing for YOU doesn't matter when you become US, you can buy a house together.

TBeckett100

fab idea, flog her the house for 50% and watch her half plummet.

if she walks out on you she might leave you with the mortgage if her half isnt worth ought,

i know she may be lovely, but when money and bitterness meet, only a lawyer wil find happiness.

LEESAV

Thanks for the comments...

Her half could plummet while the money for the 50% I got from her is making money in my savings account, slightly compensating for my 50% of the property that I still own which is also losing money.

Could be a good move for me :j

You can have a great relationship but when money starts getting involved it gets really complicated and sometimes nasty! :mad:

Doesn't look like there is a win/win solution...

RubyShoes

Im glad I am not your girlfriend!!!!

Why not just do as the other poster suggested, and move in together and see how things go before you talk about mortgages together etc...

Why would you want your girlfriend to potentially end up (and you) in a very horrible situation? Just give yourselves time.

country_sport

Sounds like a good idea to me. If she moves in for nothing and leaves a year later she may get half anyway!

takoo

Hi
Points to consider:

1. You mention spending £25,000 on improvements. After she has bought-in who and how will such decisions be made?
2. Will she want to spend another £12,500 to match you as an equal-owner?
3. Who will pay the council tax and othe property outgoings? Have you agreed such matters?
4. Will you be joint tenants (survivor takes all) or a tenants in common (can will away a share)?
5. Will you both pay a share of the solicitor's costs etc?

Hope this helps

Takoo

Johnhowell

Leesav,

I am buying into my partners property, once the sale of mine completes on Friday.

You have to be aware that stamp duty will be due if the transfer of part of the property goes over the £125k threshold. If a mortgage exists then that is added to the consideration paid into the property - relative to the share being aquired.

Because of the value of my partners property is high, I am only buying in a third share. We will write a deed of trust document to identify that share as Tenants in Common. So only a third of the existing mortgage is added to the consideration - not half as in your case.

You should be OK, if the following is your case:

value = £200k => halved to £100k share
mortgage = £23k => halved to £11.5k

therefore £111.5k => below stamp duty threshold...phew!

Regards,
John

prudryden

Be sure to set up a legal agreement that should one of you want to sell that the other has first right of refusal. And if you cannot agree on price, that he has to go to auction within a certain period of time.

Also, be sure both of your wills are up to date and it directly refers to the property and how it should be allocated.

LEESAV

RubyShoes wrote: »

Im glad I am not your girlfriend!!!!

Why not just do as the other poster suggested, and move in together and see how things go before you talk about mortgages together etc...

Why would you want your girlfriend to potentially end up (and you) in a very horrible situation? Just give yourselves time.

Great point, thanks, don't want either of us to lose out.

My partner is living with me, she has for the last couple of years paying me a bit of rent. I just know she's not the best when it comes to money, budgeting etc that's why I would be scared to get a house together and the reason why I thought she could buy a share of mine to see how she copes. If we did get a house together I might be in a posititon where I couldn't afford to buy her out if it went wrong.

Some great advice given so far, a lot of things I need to consider.

• set up a legal agreement that should one of you want to sell that the other has first right of refusal
• be sure both of your wills are up to date and it directly refers to the property and how it should be allocated
• be aware that stamp duty will be due if the transfer of part of the property goes over the £125k threshold (inc. outstanding mortgage)
• both need to find out about and share the costs of the solicitor etc

Anything else I need to add to the list?

1. You mention spending £25,000 on improvements. After she has bought-in who and how will such decisions be made?

I guess we will have to decide this, we could get the house valued before improvements and my partner could take out a bit extra to cover her half or I could get it all done myself and then she pays 50% of what the house is valued at afterwards.

2. Who will pay the council tax and othe property outgoings? Have you agreed such matters?

Bills would be split down the middle

3. Will you be joint tenants (survivor takes all) or a tenants in common (can will away a share)?

Don't understand the difference, need to do more research!

"Sounds like a good idea to me. If she moves in for nothing and leaves a year later she may get half anyway"

This is where it gets even more complicated...
A while after my Dad passed away my Mother decided to downsize the family house and give me and my sister a chunk of money to get us on the property ladder. We both bought houses but because my Mother was frightened of this happening (partners potentially being able to take away some of my early inheritance) she put both houses in her name, on paper she owns 7/8ths of my house.

This is another frightening thing as if God forbid she was to pass away then I could be liable for a big chunk of inheritance tax on my house or even worse. Also, if she had to go into 'care' for any reason, my house could be classed as one of her assetts and be used to fund the 'care'

Why is life so complicated!!!

Again, sorry for the long post, just banging my head against a wall at the moment :think:

loulou41

be aware that stamp duty will be due if the transfer of part of the property goes over the £125k threshold (inc. outstanding mortgage)

I was not aware of the above. Intends to buy a house for adult children 50/50. Hopefully, in future if all goes well, the house will be transferred in daughter's name. I thought this was only going to involve transfer the deed in her name and this can be done by a solicitor. I am not aware of stamp duty will be due if the transfer is to take place. I thought it was very straight forward. I know it is going to be complicated buying a house in joint name. Thanks