I want to help DS buy a flat, would this work?

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He wants to move in with GF. I have some money that was always earmarked to help DC with a first property purchase.

He's looking to buy with GF, who is perfectly nice and they seem good together, but I'm not sure I'm ready to give my money to her.

So, I was thinking, we own the property between the three of us. I pay 1/3 as a deposit and they're responsible for the mortgage. If/when the property is sold, the proceeds are split 3 ways, so if they do split up, I get the deposit back, which DS could use to buy something else.

Ultimately my plan would be to give them my share, but I'd like to see the relationship blossom for a while first.

This might also make it easier for them to get the mortgage, as my income could be considered.

If it makes a difference, I don't have a mortgage of my own.

Would that work?

Early 50s with a good income and very low outgoings.

Could you gift him the money, so he adds it to their existing deposit, they get a mortgage and buy as 'tenants in common' with your gift included under his share?

So, if you gift £100k, and the flat costs £300K, and the deposit they've saved already is joint, he will own 66% and she will own 33%. If she's saved more of the deposit the percentage can be adjusted accordingly.

Alternately, you could have an agreement drawn up so that, if the property is sold, and the value of the property has increased, a revised calculation of the original £100K contribution (according to a CPI calculator) is deducted before the remaining amount is split in half.

They would be getting something out of renting though, the confidence that they will get on living together! It's a very expensive mistake to make otherwise.

You and your husband may have moved in together the day after your wedding, but you were already confident enough to commit to spending the rest of your lives together, so that's an entirely different situation!

Another one saying they should rent first.

It's false to say that they have 'nothing to show for it' - they have a home.

Not only that, but they have a home which (assuming legit and professional LL) will have all the major maintenance looked after, will be safe in terms of gas & electrics and most importantly, they will come out in 12 months knowing whether they are compatible without having spaffed ££££ on stamp duty & legal fees and the pressure to negotiate a sale while they separate etc etc.

If your son was buying outright & the other moving in, I'd say crack on but buying together when they have never lived together is crazy.

I missed that you were potentially going to be on the mortgage (as well as the deeds) but only they will be paying the mortgage? That’s a bad idea for all three of you.

give the money directly to him and both of them need to ring fence there individual contributions to the deposit
there no need for you to be involved
and from the GF point of view I wouldn’t be comfortable with it being team you and son and her

Way too messy, I wouldn't get involved in this. Put his deposit money in a premium bonds account to give to him later.

Advise him to rent with his girlfriend for at least a year to check that they're actually compatible. How long have they been together?

I suspect you don't mean to but it all sounds very controlling.
'I'd like to see the relationship blossom for a while first', 'I was only seeing it as a short term thing while we make sure they can actually live together successfully', 'I don't like the idea of paying rent'.
Where are their voices in any of this? These are adults, presumably?! If I knew the girlfriend I'd be telling her to run away from what sounds like a heap of enmeshment.
By far the most sensible thing for them to do is to rent first to see how living together works for them. Its not wasted money, it's spending a relatively small amount in the grand scheme rather than jumping in with a much lager financial commitment. If and when they want to buy, and if you still want to support them, I'd be looking to give him the money and asking him to protect it, so he gets his fair share back if they split and need to sell. Anything else is inserting yourself in the middle of their adult lives.

You are trying to be kind, but thinking about the perspective of the GF it seems a bit controlling. You want to downsize, therefore your son needs to buy a house with (relatively new?) GF because you don't like the idea of rent. If he is so reliant on you to make big life decisions, maybe he is not ready to own a home with his GF anyway. I think you need to approach him moving out first, and the support to buy his first home can come later. I think it would be more normal for you to pay towards his half of the deposit.

Oops cross posted with @PinkArt but I agree!

DH and I moved into our first shared home (owned) the day after our wedding, which was the way the vast majority did it back then.

Not sure how you got married over 50 years ago, if you are only in your early 50s now.
Of course people lived together before getting married in the 1990s !

Relationships break up so if it were me I'd always make sure my DCs deposit was protected.

What’s all this “we”?

bit too involved in this relationship OP.

It's come about because I really want to downsize, which means he needs to move out!

Woah - you mean he's still living at home No no no no no. Has he ever lived independently? He needs to. And they both need to live together before committing to buying a house.

Then you were very unusual in moving into a house you'd bought together when you got married, having not lived together before. I’m the same age and everyone I knew rented together first, before even thinking about either marrying or buying a house together. You need to know you’re compatible for a life together before making either commitment. Renting is what you do when you’re starting out in life, then save a deposit, and then buy a home. Wanting to have everything when you are at the very beginning of your career and adult life is a very privileged position to be in, and not one which is general. Being prepared to live frugally, potentially suffer hardship, and build a good life together is a very good way to approach life: it means you manage better when things aren’t ideal, which happens to everyone at some time.

Yikes, you sound like my 80 year old father!
Renting is far, FAR cheaper if the relationship breaks down after a few months. Repairs and maintenance are the landlords responsibility, and you can test out different areas without committing. It's also possible to live in a vibrant area which is usually beyond financial reach of new starters.

They (you) would have to pay more tax on the purchase as you have a home plus capital gains tax, possibly, when you make the money into a gift. Also no-one knows the future and potential inheritance tax.

Either delay downsizing while they develop their relationship a bit or gift him the money and they own as tenants in common.

The very best advice was given in the very first reply.

Other PPs have also mentioned about the problems caused by you part owning the property in terms of things like increased stamp duty and also capital gains tax.

A declaration of trust achieves exactly the result you're looking for. It will say something like this:

"If the house is sold then DS will get the deposit of £xx,xxx and then DS and GF will split the remaining equity in the house equally"

It is a legally binding document, so don't worry about him not getting the money. It can also include other matters such as if one person has paid for all the furniture, what happens to that?

There was an article in The Guardian quite some time about just this thing:

https://www.theguardian.com/money/2014/jun/26/honour-declaration-of-trust-house

My parents bought my place outright for me after receiving inheritance from the sale of my GPs house, we have a declaration of trust and if I sell up before I've fully paid them back then they get their money back before I get any but they aren't on the deeds. You could write up something similar laying out your own terms. I pay £200 a month which I barely miss and their help has been an absolute game changer during the CoL crisis and COVID and not having to worry has been amazing.

Would the declaration of trust still be valid if the couple married and subsequently divorced?

It depends.

Like with a prenup, it will be given significant weight but is not binding.

A declaration of trust is invalid on marriage but can provide signals of intent.

OP a mortgage company will hate what you're suggesting, a non resident person on a 3 way mortgage! And the deposit would still be at risk without a declaration of trust anyway.

Just advice your soon to get a declaration of trust. That is all that is needed.

A deed defining the shares of a property would not be invalid on marriage.

Lots of married couples own property as Tenants In Common, and leave their share directly to their children, for example.

However, on divorce, the total marital assets would be looked at to decide who gets what, in which case it might be decided that the marital home gets divided irrespective of the Deed.

This might help, there’s a section on how to protect the deposit

hoa.org.uk/advice/guides-for-homeowners/i-am-buying/gifted-deposits/

This is what you do.