My husband wants to...

40andlovelife · 2025-03-23T09:44:24+00:00

We bought our house about 14 years ago for £165k and it is now valued at £300k. We owe about £150K on the house still as we remortgaged once. My husband wants to take £30k out of the value of the house to use as a deposit to buy another house which he plans to rent to a family member. He will pay the excess cost that this puts on the mortgage every month, Can anyone see any obvious disadvantages to me of this plan?

OldGothsFadeToGrey · 23/03/2025 09:46

extra stamp duty and then 3 months down the line the relative stops paying rent but ‘family’.

also he’s not paying the excess, you are, in extra mortgage payments and the fact you are married so it’s from the family pot.

its a no from me.

Original poster

40andlovelife · 23/03/2025 09:50

OldGothsFadeToGrey · 23/03/2025 09:46

extra stamp duty and then 3 months down the line the relative stops paying rent but ‘family’.

also he’s not paying the excess, you are, in extra mortgage payments and the fact you are married so it’s from the family pot.

its a no from me.

Edited

To be honest the stamp duty thing he will cover and if the family thing fails He will always get a renter in the area. That's all his issue which he will deal with and I will have nothing to do with it

I'm more concerned about the impact of the extra equity being taken out of the house on me. I don't know if I'm missing something,

OP posts:

mounjaromarc · 23/03/2025 09:53

Could you evict a family member if they don't pay?

fivetriangulartrees · 23/03/2025 09:55

Presumably you're both named on the mortgage on your home? So you are individually responsible for paying it. If your husband stops paying the mortgage, you are obliged to continue paying the whole thing, including the bit he's taken out for the deposit on the other house, whether you own a stake in that other house or not.

Original poster

40andlovelife · 23/03/2025 09:55

mounjaromarc · 23/03/2025 09:53

Could you evict a family member if they don't pay?

Of course! Luckily it won't be my problem though. It's his family member

OP posts:

confusedlots · 23/03/2025 09:56

In the long term you’re paying more interest on your own mortgage. He will also have to pay tax on the rental income and you’re now going to be paying interest on 2 mortgages. Not a big issue when interest rates were low but it is much of a bigger issue now. Maintenance costs on the rental house and keeping up to date with all the changes in legislation for rental properties including potential costs for improving insulation and electrical safety work.

I do have a rental property and as much as I wanted to keep it long term I think I’ll probably end up selling it in the next couple of years, it’s just not worth it anymore

Original poster

40andlovelife · 23/03/2025 09:57

fivetriangulartrees · 23/03/2025 09:55

Presumably you're both named on the mortgage on your home? So you are individually responsible for paying it. If your husband stops paying the mortgage, you are obliged to continue paying the whole thing, including the bit he's taken out for the deposit on the other house, whether you own a stake in that other house or not.

Thank you. This is a good point. I hadn't thought of this probably because I don't envisage he would do this, but yes you are correct this is an important consideration for me because no one can be trusted 100% can they.

OP posts:

confusedlots · 23/03/2025 09:58

Oh and if he ever sells the rental house in the future, he’ll pay capital gains tax too

PlanetOtter · 23/03/2025 09:59

You’re sounding really blasé about the potential family issues. It’s not simple legally to evict a tenant, and it’s not simple emotionally to evict a family member.

You say it would be your husband’s problem if that happened, but you must have a very weird domestic set up for that to be true. Don’t his finances and stress levels affect yours?

Voldemortifying · 23/03/2025 09:59

Never rent to family. It doesn’t end well.

Has he factored in capital gains tax?

soupforbrains · 23/03/2025 10:01

The new house will be in both of your names too yes??

because that’s important. Property is not an unwise investment, especially if the rental market in the area is quite buoyant. But he is using your joint equity so the new property should also be jointly yours.

you also need to ensure that even though it is a relative you have a written formal rental agreement.

Original poster

40andlovelife · 23/03/2025 10:03

PlanetOtter · 23/03/2025 09:59

You’re sounding really blasé about the potential family issues. It’s not simple legally to evict a tenant, and it’s not simple emotionally to evict a family member.

You say it would be your husband’s problem if that happened, but you must have a very weird domestic set up for that to be true. Don’t his finances and stress levels affect yours?

You're right I do blase about the family issue. I am blase about it on here because it's not the issue I am focussing on. I am simply interested in whether on the face of it and all being well, the plan will affect me in terms of my own current mortgage.

OP posts:

PashaMinaMio · 23/03/2025 10:04

Being a landlord is no joke!
Most landlords I know don’t recommend renting to friends or family. It has a habit of backfiring. If your DH had to evict a family member (who stays put and won’t move without a court order) do you not think his mood will not impact on you?
Look up the NRLA where you will find lots of advice about being a landlord, legislation and obligations he will be bound by.
Successive governments dont like small landlords. They want big corporate landlords who offer up more taxation.
If you need to kick a tenant out the law is about to change. Read up about changes to S21 etc.
Dont go naively into this. It’s not a walk in the park.

confusedlots · 23/03/2025 10:04

soupforbrains · 23/03/2025 10:01

The new house will be in both of your names too yes??

because that’s important. Property is not an unwise investment, especially if the rental market in the area is quite buoyant. But he is using your joint equity so the new property should also be jointly yours.

you also need to ensure that even though it is a relative you have a written formal rental agreement.

If the rental house is in both of their names, then some of the rental income must come to her and she will be responsible for paying tax on it through self assessment, and will also have landlord responsibilities, need to be registered etc.

Original poster

40andlovelife · 23/03/2025 10:05

soupforbrains · 23/03/2025 10:01

The new house will be in both of your names too yes??

because that’s important. Property is not an unwise investment, especially if the rental market in the area is quite buoyant. But he is using your joint equity so the new property should also be jointly yours.

you also need to ensure that even though it is a relative you have a written formal rental agreement.

But if the new property in jointly mine too, I would need to share the extra cost of the mortgage payment on our house too. I don't want to! It would be his which I am happy with.

OP posts:

soupforbrains · 23/03/2025 10:07

@confusedlotsyes but she will also have the share of the investment in the house.

otherwise her husband is simply taking £30k of their money and moving it to an investment which is solely his.

at the very least he should then be paying her back ‘her half’ of the £30k.

Original poster

40andlovelife · 23/03/2025 10:07

PashaMinaMio · 23/03/2025 10:04

Being a landlord is no joke!
Most landlords I know don’t recommend renting to friends or family. It has a habit of backfiring. If your DH had to evict a family member (who stays put and won’t move without a court order) do you not think his mood will not impact on you?
Look up the NRLA where you will find lots of advice about being a landlord, legislation and obligations he will be bound by.
Successive governments dont like small landlords. They want big corporate landlords who offer up more taxation.
If you need to kick a tenant out the law is about to change. Read up about changes to S21 etc.
Dont go naively into this. It’s not a walk in the park.

Edited

Thank you I will point him to this guidance

OP posts:

MissDoubleU · 23/03/2025 10:08

40andlovelife · 23/03/2025 09:55

Of course! Luckily it won't be my problem though. It's his family member

Show quote history

But will HE evict his family member? Keep in mind it’s not always all that easy to get tenants out. Especially not when he’ll have his whole family breathing down his neck to just give them another couple of months get on their feet…

OldGothsFadeToGrey · 23/03/2025 10:09

40andlovelife · 23/03/2025 10:05

But if the new property in jointly mine too, I would need to share the extra cost of the mortgage payment on our house too. I don't want to! It would be his which I am happy with.

Show quote history

It’s not ‘his’ though, it’s a marital asset and you will already be responsible for any additional cost on your house, plus any money he pays to top up costs is half yours

DaphneduM · 23/03/2025 10:10

Both my husband and I have been landlords in the past. It's a lot of hassle for very little return by the time you've taken your costs out. Renting to family would also be a red flag to me. If they can't buy their own house, how reliable are they financially for paying the rent? (Or is the taxpayer paying it i.e. benefits?). I would steer clear myself. Your husband also may find out the hard way that he actually won't get any thanks from his relative for his largesse.

TwoUnderTwitTwoo · 23/03/2025 10:14

He will probably have difficulty finding a buy-to-let mortgage to rent to a family member. They are all unregulated, have strict conditions, often require a particularly high deposit (for the reasons outlined above) and tend to have a higher mortgage rate. If he tries to get an ordinary BTL mortgage and lies about his tenant being a relative then the bank has the right to demand immediate repayment of the mortgage or repossess. Has he outlined the detail of how this BTL for his family member will be financed? It is a marital asset, affects both of your credit scores, and defaulting on it could result in repossession of both the BTL and your marital home.

rommymummy · 23/03/2025 10:26

I see it’s been mentioned but the main issue I see is getting a mortgage that allows renting to family, usually mortgages won’t allow it

crowsfeet57 · 23/03/2025 10:27

Just to make you aware, if the family member is planning on claiming housing benefit to pay the rent, the claim will be rejected unless your husband can prove that he has rented the property to unrelated people in the past.

Buying a house specifically to rent to a relative will definitely not qualify,

Original poster

40andlovelife · 23/03/2025 10:30

Thank you for the replies. Very interesting about the BTL mortgages for family members. I reckon he has no idea about this and will tell him. Family member has lots of pensions and not entitled to housing benefits.

OP posts:

Bestfootforward11 · 23/03/2025 10:32

I’m really not the most financially savvy, but something doesn’t sit well with me here. He wants to remortgage your joint asset so he can buy an asset in his own name. I get why you don’t want to get involved in the second purchase as you would become liable for those mortgage payments too. But he is benefitting from this arrangement in that he will now have another asset and you will not. I get that he’s saying he will pay the excess cost but at the end of the day he is building assets and you are not. Also I think most landlords will tell you that it comes with extra costs eg having to fix stuff or pay the mortgage when payment gaps etc. it’s unlikely to come without difficulty in which case I’d be worried about the impact on you.