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Original poster

Can you have "shares" in a flat that you're renting

12 replies

mouldygrapes · 09/01/2020 12:26

A close friend is seeing a bloke that our friendship group don't trust. A lot of things he's said have turned out to be complete bullshit but she seems very caught up in his web.

The latest is that he apparently has "shares" in the London flat that he is currently renting. He wants her to move out of the flat that she owns and into his flat. He says the long term plan is that they'll go abroad and he'll be able to get rental income from his "shares".

Is this a thing? I've never heard of it before....

OP posts:
ElluesPichulobu · 09/01/2020 12:34

he may mean shared ownership or a rent-to-own scheme like wayhome but all the schemes I know like that would not allow him to go abroad and rent out the property.

CakeAndGin · 09/01/2020 12:35

There is shared housing in which you own a part of the house and pay rent on the other part of the house. So for example if you own (or have a mortgage on) 75% of the property, you pay rent on 25%. With some shared housing you can also increase your shares over time to own 100% of the property, some is capped. However, with most shared ownership you wouldn’t be able to rent this out to someone else. You would have to sell your share of the property and the housing association would find a new owner.

Friends aren’t always going to listen to our advice with dickheads. If she’s still caught up in the lies he’s telling, I’d urge her to rent her flat out if she has enough capital for a buy to let. That way, when it goes tits up, she’s not sold her flat and even if she has to short term rent, she still has her own property. I’d also ask him about the shared ownership as you ‘think it’s a really good way to get in the housing ladder and think you/your sister should do it’.

Bluntness100 · 09/01/2020 12:37

Yes as pp said, it's called shared ownership. You own a percentage of it. And pay rent, reduced for what you don't own. He'd get rent if he wasn't living there, as a proportion of how much his ownership was, ie what share.

Bluntness100 · 09/01/2020 12:38

Sorry my last part of my statement was incorrect it seems, I didn't know you couldn't rent it out. Possibly he doesn't either.

Original poster
mouldygrapes · 09/01/2020 12:46

Sorry, I should have been clearer.
It definitely isn't shared ownership, he's said he moved in to this rental via an estate agent 2 years ago and last year "bought shares" in it which will earn him income if he rents it out

OP posts:
catndogslife · 09/01/2020 13:27

I think that it's possible for groups of investors to team up together in order to buy a percentage of an investment property. It's a relatively new thing see article here [https://www.thisismoney.co.uk/money/buytolet/article-5544471/How-invest-property-without-landlord.html]]
However actually living in one of the properties that you own in this way does seem to be a conflict of interest to me.
If you read the article it looks as if such investments are not covered by financial regulations so may be risky.
If it's that great an investment why does she have to move in with him? Why can't he move in with her and then they can both benefit from his "shares"?
And why move abroad? Is this to avoid tax or for some other reason?

Original poster
mouldygrapes · 09/01/2020 14:21

@catsndogslife - yeah I read that article too but I don't think it sounds like what he says his set up is, and agree regarding the conflict.

It would make much more financial sense for them to move to her flat and pay towards her mortgage, not his rent. I have no idea why he wants her to move into his so badly. I think she would rent out her place, she's speaking to mortgage company to see if it's possible under her current terms.

Going abroad - they've vague ideas of working in NZ or Aus, not for tax reasons AFAIK

OP posts:
HollowTalk · 09/01/2020 14:26

I would really worry if a friend of mine was involved with someone who seemed financially dodgy. I wouldn't encourage her to have him move in with her if he's not reliable.

longearedbat · 09/01/2020 14:59

In my experience you have to let people make their own mistakes - you will never get any thanks for sensible words of caution, but, I think she would be making a mistake to sell her property. I would have to be very sure of a bloke to throw my lot in with him on a whim and vague promise. Tbh he sounds like a bullshitter. Also, its very difficult to just go and live/work in oz or nz unless you have a skill they actually want.

Original poster
mouldygrapes · 09/01/2020 15:20

@longearedbat - yeah, she's not really wanted to hear it so far. I think she's very taken in by his charm. We've all urged her not rush into it but he seems quite pushy which also rings alarm bells.
He must be paying his rent so far so presumably he's not a complete disaster financially, although I wouldn't trust him.

OP posts:
Original poster
mouldygrapes · 10/01/2020 21:55

She’s questioned the “shares” and he’s now saying it’s shared ownership which he got after renting it for a year.

I just don’t think this adds up.

Rightmove has it last being sold in 2016 and his supposed shared ownership started last year...would the land registry be updated for a change in ownership?

OP posts:
LolaSkoda · 10/01/2020 23:10

I had a friend once who went on and on about how successful she was to have bought her house so young. It eventually came out that it was a housing association home. When she confessed, she said she felt insecure because she’d grown up in a family where money was scarce, and she wanted people to see her as who she thought she was.

It may be that the guy bullshitted her in the beginning out of insecurity and now can’t see a way out of his lie without feeling foolish. Definitely agree it’s right to be very cautious in this situation though Hmm

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