Buying house from auntie

[Nyxx92]

Hello all. Just picking peoples brains really.
Is it possible for my auntie to privately sell her house to me?She owns the house outright so its mortgage free. So could we set up a mortgage but without any bank involved. Of course we would have a charge (i think its called ) on the house like a normal morgage to protect my Auntie if i cannot make mortgage payments so that she will get the amount owed when house is sold. And i can afford the payments i just struggle getting money saved for a normal deposit with 2 kids and all.
How would it work with interest rates?
Has anyone else done this ?
Many thanks
Xxx

Lots of naysayers on this thread but I think it'd be possible. You can have a charge put on a house (have a solicitor draft this) which is then registered at the land registry. You can say when it is to be repaid and set a time limit etc.

Also conveniently Aunt/ niece is not a "connected person" so any taxes due (cgt and stamp duty) would be at the value of the actual sale rather than independant valuation. Which is good if she's offering you a bargain.

Yes it's perfectly possible to do this and any competent solicitor would be able to do the paperwork and conveyance including placing the charge at the land registry. In order to protect both parties I would advise legal advice be sought and a quote obtained for the conveyance. It shouldn't cost more than 700 pounds or so. It is possible to save costs by not having the usual searches carried out but if a motorway is planned through the middle of the house you wouldn't have any comeback on anyone! It is possible to do the conveyance yourself but if you haven't done it before and have no knowledge of conveyancing you will struggle. Your aunt will want to protect her investment so use a solicitor.

Forgot to say, perhaps your aunt could charge interest of 1 or 2 percent over bank of England base rate. Easy to work out. Plus an amount off the capital sum each month. You can easily work out the figures but reassess each year to ensure you are on track to pay off the capital sum within your time frame. Also think about the term of the loan ie. how long it is for.

Thankyou so much for all your replys. Its nice to know its a thing and we didnt make it up ! We will look into getting legal advice now and see where it takes us. Thankyou again everyone
X

Hi OP! We are currently in the process of buying my grandparents' house from my mum and dad!

We are going through our bank to apply for a mortgage. That way, my parents get their inheritance money straight away so they can retire and we get a house at slightly less than market value that we can live in while we're buying it!

For us, getting a proper mortgage was the best thing to do. We also wanted to officially be on the property ladder so we have something for our daughter should anything happen to is. So the house will be tied into our will/life insurance etc.

Of course it's up to you what you do but that's just our story!

Set up a rental agreement whereby if you rent for say ten years you are entitled to buy at a price reduced by what you have paid? It's what they effectively did with council houses.

We're doing this in a very simple way. I'm buying a small property with an inheritance for my son in his name. He will pay me a mutually agreed amount each month. So he gets a secure home - he'd never get a mortgage - with an interest free loan. No stamp duty to pay and no inheritance tax.

No legal advice from me, but the question is quite straightforwards.

OP's Aunt not desperate for money now but quite happy to have the (lets say) £200 000 at £500 pm over 400 installments (33 years!!!).

Question is, is there any reason they can't do this.

Obviously would have to each get separate solicitors to draw up an agreement and work out at what point the OP 'owns' the house.
Don't know how stamp duty would work {might not be applicable if a cheaper house of course}.

Always the potential for major, long lasting family break ups when mixing family / friendship and money though.

It isn't a very good deal for the Aunt (if she isn't charging any interest), but she might be just being very generous and would like to help out a family member.

Lots of people talking nonsense, of course you can pay her in instalments. It might not be what others would agree to do, but its her house and future funds from it so its up to her (your aunt).

It would still need to go through a solicitor for conveyancing and be registered with the land registry.

It sounds very generous of her but if shes happy to do it then why not?

Get it valued and agree a price then both go and see a solicitor.

As she is being so generous make sure you always pay as if it were a bank and that you could lose your home and never take it for granted.