What would you do - any advice please?

[Iloveadrianmole]

My partner has a flat worth approximately £200,000 with no mortgage. It is near the centre of a large northern city and in a popular area so hopefully easily rentable. Currently we live together in a rented house with my DD (15) and my DS (13) - he has no children. I moved back from living abroad after I left my husband so currently I don’t own a house. We are looking into buying a house together and we’re wondering what to do - sell the flat and put all the equity into a new house or release some equity from the flat and put it as a deposit for the new place and rent out the flat. The flat would rent for roughly £950 per month and a family home around the area we live would be around £350,000. We are tied to a certain area due to school etc. We have arranged to get financial advice but I wondered if anyone has any suggestions as to what they would do in our position? Thanks!

I would sell the flat if you can. No point in having two properties to worry about.

Personally I wouldn’t be buying a house if I have no financial claim on it

If you aren’t putting any money in to a deposit I mean

I love Adrian Mole too
I think it’s more your dp’s call as to whether he wants to sell his flat or not as he owns it outright. If not perhaps you could wait a few years until school’s are not part of the equation. Lots of northern cities have nice family homes for less than that if you’re not stuck to a particular area.

Isn't there now more taxes you have to pay if you own two properties? So really it depends on what DP wants to do.

He can protect his share of the investment by you buying as tenants in common instead of joint tenants. You can own a certain percentage of a property for example he could own 75% to you owning 25%.

Or just get married first and that will solve it all.

*owning

And I'm not a marriage fanatic .. I'm happily unmarried and own a property with my DP

You pay income tax on the income you receive from the rent less expenses incurred. If it is not your partner’s main home and he owns two homes, when he sells the second home (the one he doesn’t live in) there will be capital gains tax to pay.

Therefore decide if you need the income. Is your partner better off just having one property? Therefore is it better to sell and buy one property between you? Could you carry on renting, rent out the flat, and see how it goes?

Don't sell. He will get a far better return on 200k from a property than anything else, plus the eventual increase in the capital investment. Hold the new property as t in c and get a deed of trust drawn up to protect yourselves in the event of a break up.