Friend thinks I’m greedy for wanting to buy somewhere, AIBU?

[NCaway]

Currently live with DP in his London apartment. The property and location is everything we could want, and I pay only a small contribution to my living there which allows me to save well. The only issue is that it’s not “mine” and from a financial security perspective, I’m keen to get on the property ladder.

DP doesn’t want to sell his flat, but he’s happy to rent his place out and buy somewhere with me (rental income would go towards our mortgage). DP bought his flat years ago and having looked at todays prices, to get something similar we’d need to pay £250k + more than DP paid for his place which would mean high repayments OR we’d need to move further out of the city which we aren’t keen to do (no DC and our friends/careers here). We’ll both have to use all of our savings if we buy and would be a bit worse off each month due to interest rates (even with DP’s rental income).

Was discussing with a close friend who thinks it’s “greedy” and crazy of me to want to buy somewhere given the current climate and my circumstances i.e. DP and I can live at his place at such a low cost. AIBU for wanting to purchase a place that is “ours? In my mind it’s still a financially sensible decision to buy to secure my future, unless I’m missing something!

Ignore your friend. You do what you feel is best for you
Property is a good investment

Do what works for you.

Adding you to DPs mortgage seems to make more sense though.

Buying property is a very good choice in times like ours. It is always an investment until the government makes it impossible to rent it out. But it is way better than keeping your money in a bank. Lord forbids anything happens to your relationship, at least you will have a place to stay. Just get a proper lawyer to protect you and your part of the investment.

Why don't you buy a buy to let place, and stay living where you are? Alternatively, if you both know that you want this relationship to be for life, why don't you get your name added to his mortgage, and you pay half of it?

Your mates jealous.

Having a second property is a pain, plus there's capital gains tax to pay when you sell. Are you ready to buy one place together?

Yanbu. It's totally understandable that you want to buy and have that security.

If anything it's your DP who's protecting his own position by prioritising his own place

YANBU, but brace yourself, the anti-landlords are coming.

Your “friend” is a dick. Why do you even bother talking about your plans with someone who’s such a prick?

keep the decisions you make to yourself and don’t invite jealous twats into your head

Yes true. But as rental prices are so high at the moment, it could make sense to rent out DP’s place rather than sell as the rental income would cover much of our mortgage long term. Swings and roundabouts!

Could the current place not become yours too? Like pay properly to live there and contribute/buy a share? Moving when you're happy seems odd.

That’s a good point re DP and something I hadn’t thought about that way!

Yanbu I think you are sensible to buy while you can.

Bricks and mortar are a solid investment in UK.

I'm another who thinks your mate is just jealous.

You do what's best for your own financial security

It’s a good idea but I wouldn’t buy right now. Wait and see what happens with the housing market and interest rates.

Is it worth considering buying your own place as an investment and letting it out, maybe out of the city? Stay living with your DP but have a place of your own and a foot on the property ladder.

I don’t see how it’s greedy. You are, sensibly, looking after your best interests.

This would be my suggestion too.

Buy something yourself and rent it out. Continue living with DP in his flat and contribute as you are.

I did consider this but the income criteria for a buy to let mortgage at the moment is ridiculous and not something I’d meet as a single person, even with a city salary!

If you decide to become a landlord here's some advice.
Use a recommended agent. If you have one that, for a higher rate, includes landlords insurance in their deal it's worth considering. They then jump straight in to activate the insurance if there are problems, for example missed rent. Also they make sure you meet your legal obligations.
Plan for "void" periods and unexpected repairs. It's said that you should be able to cover the property costs with no income for 3 months, but I'd say 6.
Don't put more than you need into the property - provide essentials but think twice before putting kitchen white goods in and definitely not furniture. Anything that goes wrong has to be replaced.

Sadly, expect to have to redecorate after each tenancy, if you don't have to that's great.

Make sure you're informed about the proposed changes in law re rented properties. Being a landlord is becoming less and less attractive to be honest.

Your friend sounds jealous and financially illiterate, ignore and carry on.

Would DP consider adding you to the mortgage for his existing flat? Maybe some sort of arrangement that protects his input to date then shares it with you thereafter? Or maybe some sort of arrangement where you use your savings to 'buy in' to his mortgage/deeds on his flat?

That's what I'd try and do I think.

Hi OP
Make sure your OH does his sums on the tax liability as a landlord. I'm not 100% on the numbers so take the below with a pinch of salt but:
-He may have to pay an additional 3% SDLT on his share of the new property as it's not his first/only home (could be wrong here)
-The interest on the mortgage payments is no longer tax deductible, I believe there is a 20% credit of some sort. So for a higher or top rate tax payer, you're far worse off that you were before.
-Capital gains payable on a property that is no longer the primary home. On a pro rata basis.

There's not a huge amount of upside being an accidental landlord any more. Have been there and was happy to get out of it.

Who cares what your mate thinks? Your financial matters are none of their business.