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AIBU?

Share your dilemmas and get honest opinions from other Mumsnetters.

Original poster

Good or Bad Idea?

62 replies

MochynBudr · 12/09/2019 09:20

Morning Mumsnet Grin

We have been renting our family home for just over 2 years. LL is a young man and he's brilliant. With the way things are, we are struggling to make any savings towards a house deposit so I've come up with a crazy idea. I was wondering if this is something you would consider at all?

LL bought the house for £114k a few years ago. We pay £700 pcm rent. I want to suggest that we love here rent free for 2 years and what we save in rent goes towards a house deposit. After 2 years, we use the money we have saved in rent to buy the house from LL for £125k.

I know it sounds crazy but is it something, as a home owner/landlord you would consider? I know there's more details to consider but on the while? Or am I bonkers? Blush

OP posts:
StroppyWoman · 12/09/2019 09:43

“I’ve come up with a crazy idea”

You weren’t kidding. 😂😂😂
Why on earth would Santa Claus - ahem - your LL sacrifice 2 years of his income because you want to save for a house?

Witchinaditch · 12/09/2019 09:43

😂😂😂😂😂😂😂😂😂

Witchinaditch · 12/09/2019 09:46

Sorry I’m still laughing. This cannot be real, I refuse to accept there is an adult out there who would ever think like this. You can’t be this stupid? You just can’t!

HeyDuggeesCakeBadge · 12/09/2019 09:49

Oh OP, no, just no. Please don't suggest this to your landlord he will think you are taking drugs and kick you out.

Namechangeforthiscancershit · 12/09/2019 09:51

He's a landlord...he's kind of expecting you to pay rent!

Obviously one of those mad mornings. I'm glad you love the house though

TheTeenageYears · 12/09/2019 09:56

Even if the LL entertained the idea there is no way a mortgage provider would. You are talking about paying higher than market value for a property and putting down the smallest deposit possible. No one is going to give you a 90-95% mortgage on a property at 10% above market value.

BloodyDisgrace · 12/09/2019 09:56

Living rent free?
Wow. Send me your address please, I can then post you my diamonds and a check with all my savings.

RavenLG · 12/09/2019 10:03

Of course the landlord subsidise your living while still paying a mortgage himself. Of course a ll is going to let someone live in their property rent free for 2 years. It's a no brainer Hmm

On a side note OP, do you smoke a lot of opiates?

StCharlotte · 12/09/2019 10:09

If he's prepared to sell, the least lunatic idea might be to purchase now but exchange and complete simultaneously so there is no deposit needed. Although your mortgage company might not approve a 100% loan but then they won't approve an over-value loan down the line either.

Yeah. Madness.

Idontwanttotalk · 12/09/2019 10:10

Firstly, your maths is rubbish. He would be letting you off paying £16,800 in rent (£700 x 24 months) yet you would offer him only £11,000 more than he paid two years ago? He obviously wouldn't go for that.

Even with your update where you say you'd offer, say, £135k for the house if it's valued at £120k, you are being extremely naive.

Firstly, why would a LL forgo his income and profit? He will make more money from renting in the long term than from a one-off gain from you.

Secondly, a Mortgage company will not let you have a mortgage for the full amount you need where the house is overpriced. They value the house to protect their investment and they will only mortgage to a certain % age of the valuation. If they offer 80% mortgage they will generally only offer a mortgage of 80% of the valuation, not 80% of the purchase price.

You say you are struggling to save for a deposit. You need you increase your income, and/or reduce your outgoings if you wish to buy your own home. It'll be best for you to concentrate on thinking of ways to do this.

Idontwanttotalk · 12/09/2019 10:17

I'd be interested to know who the 1% is/are who think this is a reasonable suggestion.

bridgetreilly · 12/09/2019 10:17

OP, this is why it's always hard to rent a house, because you are paying someone else's mortgage and not able to use that money to save for your own home. But unfortunately, this 'solution' is never going to work for all the reasons pps have said. Try looking for a shared ownership scheme?

justheretostalk · 12/09/2019 10:24

LOL!!!

This is legit the funniest thing I’ve ever read on here!

You’re hilarious OP!

HollowTalk · 12/09/2019 10:30

Your maths is terrible!

It's now worth £114,000.
Your rent for two years would be £16,800.
If you add them together you get £130,800.
You are going to offer him £125,000.

So your plan is that the landlord has no money to pay for his mortgage or expenses for two years, and then sells it to you at a loss of £5,800?

daisyjgrey · 12/09/2019 10:34

I'm a landlord.
How am I paying my mortgage etc for the two years you're 'saving' the rent?

dollydaydream114 · 12/09/2019 10:49

Er ... what?!

How do you propose your landlord manages while being £700 down every month for two years while you're living in his house rent-free?!

Why would he want to sell the property to you anyway when he clearly bought it to rent it out and is making £700 a month from it?

How do you know £125K will be a fair price for the house in two years' time? Anything could happen to the property market in that time. He paid £114K for it 'a few years ago' and you're expecting him to sell it for only £11K more than that in two more years' time?

Also ... he would be letting you off £16.8K rent, so if he sold the house to you for only £11K more than he paid for it, he would be losing at least £5.8K on this deal. He would literally be giving you nearly six grand out of his own pocket. It's not a great deal for him, is it?

You are absolutely mad and this suggestion is CFery of the first order.

BadBehaviour · 12/09/2019 10:56

A little crazy Op, but god loves a trier. However your LL might not. Grin

It’s hard to save for a deposit though. Have you got any income not accounted for?

greathat · 12/09/2019 12:07

I'm guessing finances are not your strong point. Maybe have a look for savings etc advice on moneysavingexpert

GlasshouseStoneThrower · 12/09/2019 12:13

Totally mental. What if you lost your jobs in two years, or the house has a structural defect and needs £10K of work, or you found a better house, or any number of potential issues. No landlord would agree to this in a thousand years.

And how would the numbers work? 2 years of saving £700 per month would give you a deposit of £16,800. Most banks require a minimum deposit of 10%. So to have enough money for the deposit and to pay over market value (bearing in mind the bank won't usually lend above market value) you're not going to be able to afford it unless the house isn't worth much more than £80,000.

There's so much more wrong with this idea but I think the point has been made!

19lottie82 · 12/09/2019 12:18

I was thinking a figure more than the market value of the house. So if in 2 years
the house is worth £120k we pay £135k.

A lender will only lend you the market values of a house. If you wanted to pay £15k over the asking price, then you would need the cash to fund that yourself. So that plan is a non starter straight away.

Witchinaditch · 12/09/2019 12:18

This should be in classics! 😂 I can’t believe the gall of OP

thecatsthecats · 12/09/2019 12:21

But... but...

He can charge you rent for two years AND sell to someone else, whose deposit he hasn't financed?

Sirzy · 12/09/2019 12:22

What everyone else said!

Who would be responsible for repairs in that time?

Bellsofstclements · 12/09/2019 12:23

Unless the landlord is your dad this is one of the stupidest ideas I've heard.

SilverySurfer · 12/09/2019 12:28

Totally and utterly bonkers.