AIBU - house purchase with partner

[Whatshouldidoinlife]

Hi all
Just wanted thoughts.

Partner and I want to purchase a house together.
purchase price £700,000.

I own a house and my partner rents.
My partner would pay stamp duty in region of £25-£30k.

I would put down my equity in house as deposit and ring fence that percentage of property of price and the remaining percentage would be split 50/50.

I would pay an early exit mortgage fee and the estate agent fees (around £6k).

My partner earns 3 x as I do.

If we put in our salary percentage wise -70/30 to my partner and shared the rest of the equity (bar my deposit) 50/50 does that sound like a fair deal?

Have I missed something or do I need to consider anything else?
I want to be fair to myself and him.

This.

£30,000 against a £700,000 is negligible. I would make him pay half of that stamp duty; therefore purchase costs are equal moving forward, and then nail down a percentage for OP that reflects her deposit percentage, which is sounding like it's very high compared to his zero.

You need to see your own solicitor.
You will need to draw up a declaration of trust at the minimum.
Have you sought professional advice, on your own?
Do not proceed without doing this.

conveyancing Solicitors work for the "couple" who are purchasing the house together. They do not draw up property pre-ups for one individual of the sale, that would be unethical. OP needs to have that contract to protect her assets, so she needs her own lawyer to advise her separately.

Some people will never get married though.

So of your 300k, you pay 15k stamp and 285k deposit. You then have 41% ring fenced.

Of his 30k, he pays 15k stamp and 15k deposit. He then has 2% ring fenced.

He pays none of the costs associated with selling your home.

The remaining mortgage of 400k is then split 50/50 until you marry at which point it becomes a joint bill from a joint account with mutually agreed identical "personal spends"

https://www.cplaw.co.uk/insights/no-nups-cohabitation-agreements-for-those-living-together/

Read this OP, it will help.

Ring-fence your contribution, split additional fees 50/50 and split the rest of the house based on the percentage of mortgage you both pay. If DH wants to help out more day to day due to his wage that is his choice, but you should both get out the percentage you put in.

Op said she is going to ring fence her deposit so presumably she’s already speaking or planning to speak to her own solicitor to do this. You asked why he doesn’t want anything drawn up but there was no mention of him not wanting anything drawn contracts etc

Well she's asking strangers on the internet what is a "fair deal" so my guess is no, she has not seen her own solicitor to draw up a no-nup to protect her assets, just a guess! As the partner is using tripe like "we feel like a family" to leverage his financial requests, I'd guess he hasn't seen one either, or he'd be told that the law does not care how he feels, and that his inflated salary will take decades to measure up to her massive deposit!

Just to clarify my deposit would be £300k

To me that is a huge sum of money, I would absolutely not be putting it at risk in any way (even if ringfenced) just to live with a boyfriend. How does it benefit you?

The worst case scenario even all of this aside is that you split, and it can take a long time (years in the worst cases) to force a sale. You will be unable to afford the house alone, but also unable to realise your equity to move on elsewhere. So you could quite realistically end up faced with a choice of live with an ex, in a potentially toxic household, or be at the rental market’s mercy based solely on your salary.

If I was going to do this, and the deposit had been ring fenced as a % to allow you to benefit from increased value over time (I agree the rest needs to be 70/30), I would also want to keep aside 2 years rental of something that would be realistically comparable in terms of if I had to move out.

On a 400k mortgage, say your repayments are £2k a month. If you can’t comfortably afford 50% of that, how would you afford rental costs, which have risen hugely recently? You could end up genuinely trapped.

If you go ahead, keep at least £20k as an escape fund, that would be my advice.

I haven't yet seen a solicitor legally. We have only just discussed this plan over weekend as I came across a property - we viewed it and both loved it. Of course nothing could happen and we could stay as we are but just wanted to know how I view the situation if it was fair.
I will ring fence my deposit as a percentage value - it was the remaining 60% I wasn't sure about. 30/70 contributions sounds fair for 30/70 divisions. but what happens if we want to over pay? House upgrades etc. it is messy. We have a child also. But if we don't get married does that mean we don't buy a house together?

If not committed enough to get married/civil partnership, I wouldn't do this.

But not everyone wants to marry. I don't. I've been financially stung before so am protecting myself.

what do people in my situation do?? Seems so complicated.

Sensible to ring fence your deposit but if you’re splitting mortgage payments 70/30 you only get that proportion of the equity.

Firstly, it's lovely that you found a home you want to share with your partner and child, and sorry it's got a bit "financial" from the outset, but that is what you are dealing with; it's business which is very unromantic! Leveraging his earnings and other contributions against your deposit is messy business. You need to see a lawyer on your own, and he needs to see one too, then you see one together and sign an agreed contract; it's like drawing up a pre-nup for marriage: first each individuals needs are protected, then you come together in an office and you sign the contract that both your solicitors have agreed on (and this is nothing to do with the conveyancing of your property, that is a separate lawyer).

They see a lawyer. Every big law firm will have someone in-house who can deal with this; usually they are "family" lawyers who deal with marriage, divorce, kids and financial assets like cohabitation, etc. You've been married before? If you liked your divorce lawyer, ask them to recommend someone in-house to help you.

I'd say you have more protection with marriage. You are tying up all of your money in a property, when it comes to sell he will have equal say and can turn down offers, drag his heels with paperwork or put off buyers and you can't get your money back to move on.

This in no way offers a safer or more protected route than marriage

My ex-husband did all of that anyway! It's never clean, married or not.

Yes to escape fund, so smart. Wish I'd had one.

You have a child together already - I'm guessing you took the lion's share of parental leave and are the default parent and default childcare solution if your child is ill/you have held back on your career somewhat more than your partner?

So I put in all of the deposit on my house and my partner pays 60% of the mortgage.

Essentially we are tenants in common with a deed of trust drawn up that varies ownership over time. We added all costs to the purchase price and worked out the percentage ownership which st that point was 13.5% him and the rest me. Overtime as his contributions have increased his share or we have done work to the house which we have contributed to 50:50 we have adjusted the percentage of the house we own.

Ultimately this means I will walk away with my deposit plus the amount I have paid into the mortgage and any additional equity we have built up over time and he will be in a similar position. Not sure why you would do it any other way.

The costs involved in obtaining your deposit are your expenses alone.
Any costs involved in buying the new one are joint. (These costs should be 50/50 out of your savings/equity).
Whatever % value of the new house you have left to put in as a deposit should be ring fenced as a %share (if you have 20% as a deposit, you ring fence 20% of the house value, which may go down if you sell soon after buying) Same for your partner if he has any deposit left after paying half the stamp duty & other bills.

Ongoing, you split everything 70/30 (if partner is agreeable) & partner gets 70% value of what’s left. (Still a good deal for you as only the mortgage part of those bills will result in any profit).
Iron out these details from the start to avoid arguments of “it’s not fair” down the line. If you can’t agree now, don’t buy together.

Speak to a solicitor who will be used with drawing up these kind of agreements.