How to fairly split cost of living with partner

[Handyrick]

Really need advice, this is a property and relationship dilemma, but trying to keep my finance hat on.

I have just discovered I am pregnant. I currently live in a flat and am in the process of buying a 3 bed house that needs about 80k of work. I am buying solo.

My DP currently rents and we don't live together. We will live together going forwards since we discovered I am pregnant.

We are both high earners, and combined have a total income in excess of 250k.

I am trying to decide what is best to do:

• abandon my purchase, and buy somewhere with him.
• continue with my purchase, let him move in and charge him rent.

I am inclined to go with the second option of continuing with my solo purchase and then in 2 years or so, look to buy with him. I'd personally bank all the proceeds of sale, and then contribute 50% deposit to any future purchase.

If I go with option 2, what is a fair way of splitting cost? I want to keep my financial independence and I also want to have my own personal emergency 'fund'. I was thinking of charging him below market 'rent', and then splitting all bills 50/50. I would personally take care of any capital expenditure on the house re improvements.

For context, the market rent for a 3 bed house in my area is £2.5k, so I would charge him £1k rent + bills.

Does this sound ok?

I think there is a bigger conversation to be had first about the joint costs of raising a child.

Secondly - I don’t think there is an easy answer here, without all of the context. On the face of it, living together as a family and having one person pay rent to the other just doesn’t seem practical.

You can have a preference but if I was him I wouldn’t pay you rent, I’d advise him to buy with you- you’re either together or you aren’t. Remember you’re about to take a financial hit with maternity, you may do better to merge than keep your financial independence

@BasinHaircut

I think there is a bigger conversation to be had first about the joint costs of raising a child.

Secondly - I don’t think there is an easy answer here, without all of the context. On the face of it, living together as a family and having one person pay rent to the other just doesn’t seem practical.

Yes, we have spoken about the cost of raising a child. We both want to work and continue our careers, so we are committed to both contributing fairly to childcare. Our incomes are pretty much similar.

I can provide more context if helpful?

I have 500k invested in the house I am buying, which is what I am trying to protect. It would be much easier if we just bought together now, but I am not sure if this is what I want at this stage.

@OnlyFoolsnMothers

You can have a preference but if I was him I wouldn’t pay you rent, I’d advise him to buy with you- you’re either together or you aren’t. Remember you’re about to take a financial hit with maternity, you may do better to merge than keep your financial independence

So you would suggest he lives in the place I buy for free? I am putting a 500k deposit towards the purchase.

You can 1000% secure your deposit - that I’m not disputing. But he’s hardly a scrounger but the sound of your combined income.
If a woman wrote “my baby father wants me to move in and charge me rent” I wouldn’t be impressed.

Why no joint mortgage?

You don't sound ready to have a child together.

Sorry, if that sounds harsh.

Also saying you want to carry on with your career is great but do remember your feelings could change once your baby arrives- you may want to stay home, return part time.

When DH moved in with me I continued to pay the mortgage and he paid the mandatory household bills, we both ended up better off but income was much lower. Then we split food costs, Netflix, etc. Charging rent makes things complicated in my opinion. I also agree with PP about the costs of raising a child, maternity pay and childcare being two key things to consider. You say you want to bank the proceeds of the sale and whilst your savings are yours I think things do naturally change when people have children and get married. Eg DH had a small amount of credit card debt when we married, it made no sense for him to pay overdraft charges when I could pay it off. My overriding feeling is that a general question about finances needs to be had. There are ways to protect your money so I’m not suggesting you go down the “all my worldly goods I share” route if you don’t want to. But 50-50 might not work. It might be that a 70-30 split is better for your circumstances. I’m on maternity leave (stat pay only) so DH pays the bulk. He doesn’t expect me to tap into my savings or pay 50-50 when I don’t have the money.

I think it all sounds fine to do that. If he earns that much why doesn't he already own somewhere?

I wanted to add that I have significantly more savings than DH and all the equity in our house is “mine” / “comes from me”. I’m not not having things because he can’t contribute the same amount. But we did have a long conversation about joint tenants v tenants in common. I feel we both contribute equally but that may be in financially different ways.

@OnlyFoolsnMothers

Why no joint mortgage?

We could get a joint mortgage, but in that case, I'd probably look at a different type of house together rather than the one I am buying as we would both need to agree...

Why can't he go on the mortgage with you? This seems the most realistic and fairest way.
You can secure your deposit money, get your solicitor to do it, I done it when we bought our house and cost £150 to do.

If you were my DD I would say that she should protect her deposit legally but that if she wasn't ready to buy together with her bf would she be ready to take on parenthood. After all , everything can go well but you cannot rely on that . One of you might have to delay your career progression; what happens then? Parenthood is a joint enterprise.

When DP and I bought a house together I had more of the deposit, having previously owned somewhere. We had a joint mortgage and our solicitor drew up a "declaration of trust" to declare our intentions around future proceeds (so for us I ring fenced the original investment and then, as we were paying half the mortgage each, we said we'd split the remainder 50/50). I gather it's not legally binding but is a way of capturing intentions that can be used if the relationship breaks down.

@PurBal

When DH moved in with me I continued to pay the mortgage and he paid the mandatory household bills, we both ended up better off but income was much lower. Then we split food costs, Netflix, etc. Charging rent makes things complicated in my opinion. I also agree with PP about the costs of raising a child, maternity pay and childcare being two key things to consider. You say you want to bank the proceeds of the sale and whilst your savings are yours I think things do naturally change when people have children and get married. Eg DH had a small amount of credit card debt when we married, it made no sense for him to pay overdraft charges when I could pay it off. My overriding feeling is that a general question about finances needs to be had. There are ways to protect your money so I’m not suggesting you go down the “all my worldly goods I share” route if you don’t want to. But 50-50 might not work. It might be that a 70-30 split is better for your circumstances. I’m on maternity leave (stat pay only) so DH pays the bulk. He doesn’t expect me to tap into my savings or pay 50-50 when I don’t have the money.

This sounds reasonable, but in my case, the mortgage per month is over 2k, whereas mandatory bills under 500. Just wondering a fair way for him to contribute in the interim before we buy somewhere together in 2 yrs.

@mewkins

I think it all sounds fine to do that. If he earns that much why doesn't he already own somewhere?

He has been living abroad for some years.

The trouble with charging a partner rent is (I believe) in the case of a split they may be able to lay claim to part of the equity if they can say they've put money into the property. If it's your house then you'd probably be better off taking on all the housing costs yourself and splitting household bills such as council tax and food etc.

I would ideally like to buy with him in 2 years. And somewhere we choose together. So for a 2 year period, I think it should be ok to set up some type of agreement re contribution?

So you would suggest he lives in the place I buy for free? I am putting a 500k deposit towards the purchase.

That is what I'd suggest. He can pay bills but I don't think he should pay rent. Yes he gains financially more than you do but if it's just about finances I don't think you should live together. A significant percentage of your mortgage payment will be for capital repayment and there is absolutely no reason for him to contribute to that. You can review after a couple of years and when he is on the mortgage (on this or another place) then yes he should, of course, be paying.

It'd probably be useful to get some legal advice about cohabitation when there's so much money involved.

Personally I'd see not charging him rent as a way of protecting your investment rather than giving him a free ride.

What about getting a joint account where you both agree an amount to pay in monthly that goes towards mortgage, bills, food etc and then buying things for baby could come out of that account too?

@ronswansonstache

The trouble with charging a partner rent is (I believe) in the case of a split they may be able to lay claim to part of the equity if they can say they've put money into the property. If it's your house then you'd probably be better off taking on all the housing costs yourself and splitting household bills such as council tax and food etc.

Yes, that is a good point.

Maybe I could suggest he pays all household bills and food

I think a fair approach is for him to pay half the interest payment on the mortgage. You pay the other half of the interest, plus all the payment off the capital.

The interest paid is like rent - so split the "rent" and you pay all the capital repayment (since only you will benefit from it).

The split all food and bills in half.

What about getting a joint savings account that he pays in to every month instead of rent so that you can upgrade/move when ready? Slightly more risky if you were to break up but seems less harsh. Mostly you both need to sit down and throw ideas around. He might be concerned too.