Financial split - does this sound fair?

[paminaas]

A and B are in a two year relationship and live together.

A has their own property with a low mortgage and B recently moved in. B does not contribute to the mortgage but buys all food, household items etc. A suggested this arrangement but B would be happy to pay more and keeps checking that all is ok on this front.

In the short term future, B wants to buy their own property in a more convenient location to benefit from the first time buyer stamp duty discount. The location would also be good for A who wants to rent out their property and live with B. B has a good deposit from an inheritance as well which they are keen to protect given the relationship is still quite new.

Would it be fair for A and B to split the new mortgage, bills and all necessary household expenses of B’s house? A’s rent would cover their mortgage and they would still have an asset. The new location would also be more convenient for both of them and the mortgage would be low given B’s deposit.

Both people are 30s with no kids and would want to get married one day.

Would A party for all living expenses like B does now plus half the mortgage or would it just now be a 50/50 split of all costs.

I'd probably mirror the agreement you have in place now, at least for a similar time period as you've lived together to date as then there is parity in what both have benefited.
While it might seem "unfair" that A will essentially be earning off their property while B pays the mortgage on the new place, B has benefited from not paying rent in the previous home so they will have both benefited from "free" housing while having to cover living costs for the couple.

Also makes things less messy and potentially unfair on B if they split.
If its been a case of A contributing to mortgage on new house but only 50% of living costs, while B did 0% mortgage and 100% living costs, then A could claim an interest in the new home and B would have no claim over the original home.

This is all presuming the amounts involved are relatively comparable and there's not some huge discrepancy

Ok so you’re saying now that they have lived together for 6 months, A should have a similar arrangement at B’s for 6 months (ie only paying groceries and household items) then they split all costs after that?

agree that this sounds fairer.

B’s property is likely to be double the value of A’s but the above arrangement is still probably fairer in any case.

I think I'd do that as a starting point to see how it goes and then revisit.

If I was in Bs positron I'd push for that to remain the status quo though as I wouldn't want A to have any claim on my new property and if I wanted to attribute any bad intentions to A (if they were pushing for a straight 50/50) that they were suiting themselves to set up a potential claim on the new property having protected their own asset.

I think you’d have to be really careful with this one. They’re very hot on the first time buyer criteria and if the other person is living there full time and paying towards I’m not sure it would count

Thanks both that makes perfect sense.

Totally understood on the claim point but if they are getting married at some point anyway (and will buy somewhere bigger together one day) then essentially isn’t B shooting themselves in the foot by paying a large mortgage on their own while A has significantly more disposable income?

Totally off message.

But why the heck do I struggle to follow A and B but wouldn't if it was Fred and Vera?

It’s a relatively short relationship. If a pays towards the mortgage then potentially they have claim on the property should they then split up, which may disadvantage b. To be morally fair, then a should have 6 months ‘rent free’ as b has have. After this consider creating a lodger agreement for rent until such time as the relationship moves further (marriage?) at which time consider all assets of both parties and decide on an equitable split. A will be benefitting from any profits from
yheir own property during this period which B has no access to so make sure that B assets are similarly protected

Are you planning to ring fence B's deposit but have your name on the mortgage?

If your name is not on the mortgage but you are contributing 50% towards it you will have no claim on the equity if things don't work out. It's fine if you're happy to see your contribution as "rent".