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Original poster

Selling a share in my home

84 replies

ochreloca · 22/09/2021 09:38

My first post here.
I was newly divorced 10 years ago with a young child. I was made homeless 3 times in 2 years. When my settlement came through it was not enough to buy a property outright, and I couldn't get a mortgage due to the contract nature of my work.
So, I am looking to sell a share in my home to a female single parent who is in a similar position. I live in a lovely area with great schools and facilities, quiet and safe.
Has anyone any advice, perhaps some one who has done this before? I have looked into the legal side and it can be done, but only with cash.
I have always shared my home and have lovely lodgers but am looking for something more.
TIA

OP posts:

Perfectlycontent · 22/09/2021 13:31

I highly doubt you’ve spoken to a financial advisor or solicitor at all, let alone any that think this is a sound idea.

mumwon · 22/09/2021 13:41

what happens if you don't get on or they have a boyfriend move in?
Its far to risky - your financial adviser is thinking ofthe money he gets from you for arranging this (are they FCA registered by the way look up on FCA & check there are some fraudulent advisors out there)
Please don't do this op you are asking for all sorts of problems & you won't be able to evict them as you could a tenant if things go wrong.
I think you are seeing cash being useful without thinking long term consequences

mumwon · 22/09/2021 14:09

done with cash only -yeah right - its obviously NOT legal

Nanananani · 22/09/2021 14:12

What happens when one of you wants to sell? Or property upgrades/maintenance? Or one of you gets a partner?

TheYearOfSmallThings · 22/09/2021 14:41

done with cash only -yeah right - its obviously NOT legal

Nothing to do with legality, it's just that banks won't lend in this situation. Rightly so in my opinion, considering the pitfalls.

CorrBlimeyGG · 22/09/2021 14:48

If you sell a share in your home, you'll have to get permission from your mortgage company. They lend on the basis that they have first charge over your property. How does your solicitor intend for this new person to register their interest?

OnlySpam · 22/09/2021 15:32

I'm beginning to wonder if you're actually here advertising by stealth ...

SilverGlassHare · 22/09/2021 15:37

Having purchased a share in a house they can't be evicted. What's insecure about that?

They can't be evicted, but what if you decide to sell your share and sell it to someone they feel unsafe with? What if they do the same thing? Will you have a veto clause? What if you want to sell and they veto all your potential buyers.

MyAnacondaMight · 22/09/2021 15:50

Sounds like a terrible idea, especially if the buyer is to live there too. Any sensible buyer would require a clause in the declaration of trust that permits them to force sale of the property to realise their investment.

In order to ensure you’re not made homeless, you’d need to be comfortable that the money you received was invested such that it would grow faster than property prices. Or you’d need another way to be able to finance the buy-back.

So if you’re thinking of this as a way to free up some capital, you would need to accept the risk of losing your home when the investor wanted out (unless they found someone else wanting to take on the same arrangement).

MandalaYogaTapestry · 22/09/2021 17:01

Having purchased a share in a house they can't be evicted. What's insecure about that?

I mean your insecurity, not the other person's. You want to move a stranger with her child into your home. And not just as an lodger, like an actual co-owner. You are giving up a part of your home. I cannot get my head around why would anyone do it.

And what if your child does not want to live with another family?

Viviennemary · 22/09/2021 17:06

I wouldn't go down this route. What if this person wants to sell in the future. And what is the benefit to them. Would they be moving in. Would you pay them rent on their share if not. I doubt it would be feasible.

TakeYourFinalPosition · 22/09/2021 17:18

OP is intending to use the lump sum that the person pays to pay off the mortgage, I believe. So the mortgage company won’t need to be involved.

OP gets to live mortgage free; the shareholder gets to live rent free.

The issue would be getting stuck in the house; because it’d be a niche thing for either party to try and sell on, similar to shared ownership with the council or anyone else, but less regulated. I’d always advise people to avoid those, having professional experience of what a nightmare they are, so I’d advise people against this too, but it probably is possible. It’s just not going to be popular, at all.

ChequerBoard · 22/09/2021 17:26

It's a nice idea and I get that you are trying to help someone it the position you were in 10 years ago but You need to be more cautious here.

I wouldn't consider it unless you really knew the person buying the share incredibly well - my MIL and her sister shared a house after their marriages broke up and kids left home, for example.

There are so many things that could go wrong, and frankly you could end up losing out and being back in that place you were in 10 years ago again.

What ifs include - house sharer takes up with partner you don't like / is violent / has kids that are too rowdy / invites family members to live with them / parents in a way that's unacceptable to you / gets a job elsewhere and needs to move / loses their job and can't afford their share of the utilities or any repairs that are needed.

I really really would not consider this.

scarpa · 22/09/2021 17:27

In my experience there are very, very few lenders who will agree to a joint ownership sole borrower agreement.

Even fewer still who would change an existing mortgage to this, and fewer again who would be happy with the other owner not being a family member or spouse.

Plus the practicalities - what if they or you had a huge change in lifestyle (illness, disability, newfound religion, starts collecting greyhounds, anything), or your parenting styles diverge hugely as you get older and it causes a lot of friction, or one of you meets someone and wants to move them in. Or gets the job offer of a lifetime and wants to sell up but the other can't afford to buy them out of their share. Or or or...

I'm not saying many of things are different to a marriage, but in a marriage those things are generally done with each other in mind. As two separate lives just sharing the same property, there's much less of an obligation to consider one another.

ChequerBoard · 22/09/2021 17:29

@TakeYourFinalPosition

OP is intending to use the lump sum that the person pays to pay off the mortgage, I believe. So the mortgage company won’t need to be involved.

OP gets to live mortgage free; the shareholder gets to live rent free.

Then how will OP buy the person out when they want to move on after the 5 years? The lump sum paid will have gone to the mortgage company?

Getting a mortgage at that point when part fo the house is owned by someone else would be nigh on impossible.

HeronLanyon · 22/09/2021 17:40

Not sure I understand why you don’t just have long term lodger/s and prioritise single mums in your search for same.

TheGrumpyGoat · 22/09/2021 17:46

Getting a mortgage at that point when part fo the house is owned by someone else would be nigh on impossible

Wouldn’t it just be like getting a mortgage to buy out a partner in the event of a split?

ChequerBoard · 22/09/2021 17:55

@TheGrumpyGoat

Getting a mortgage at that point when part fo the house is owned by someone else would be nigh on impossible

Wouldn’t it just be like getting a mortgage to buy out a partner in the event of a split?

No I don't think it is the same at all.

Plus OP would have to pay mortgage application fees and solicitors costs.

Persipan · 22/09/2021 18:19

What are you envisaging would happen at the end of the five years (or so)? Are you anticipating that at some point in the future the whole house would be yours again (ie you'd buy back the 30%)? What would be to stop the other party settling their share to someone else? What would you do in a situation where the living arrangement became untenable, but (as you've already noted) you couldn't ask the other person to leave?

I am a single parent and this is not a situation I'd consider entering into. If you're absolutely determined to sell off part of your home, why not look into splitting it into flats, so you could retain one (and the freehold) and sell the other? That's a far more ordinary arrangement, and one which is unlikely to be off-putting to lenders or prospective purchasers.

HalzTangz · 22/09/2021 18:57

I'm confused. Your post said your settlement didn't leave enough to buy a house and you couldn't get a mortgage. So surely that means you rent your home (due to not being able to get a mortgage), so how can you sell a share of your home?

HeronLanyon · 22/09/2021 19:17

haltz it took some doing but I worked out that op went back to employment and managed to get a mortgage and buy the house she is currently living in.
Which by the way op bloody well done.

Gemma2019 · 22/09/2021 19:59

You are trying to make it sound like you are doing something noble and offering a poor mum and child somewhere secure to live, but realistically what single mum is going to have cash to the value of a third of a house in the bank and wants to share with a stranger. If someone had that much cash then they could put it as a down payment on their own house.

What you are actually trying to do is find a way to pay off your own mortgage quickly. This weird idea is not the way.

Orpheline · 22/09/2021 20:05

mumwon · 22/09/2021 20:24

& another thing
what if the house value/ price goes up -or down
If it goes down (& this happened for a few years in the last house we bought)
they would expect to get their money back in full & YOU might find yourself having argument about this
or if it goes up - they would expect to profit

WombatChocolate · 22/09/2021 22:13

This isn’t thought through as an idea.
The points Op makes about how she sees it working contradict each other.
She speaks of giving security to someone and owners not being able to be turfed out, and at the same time it being time limited to 5 years. The 2 cannot be both true at the same time.
Mortgage lender would never agree to this, if the arrangement was fully and honestly explained to them.

Sounds like Op either needs a lump sum of cash or the mortgage is too expensive,so this seems to be a financial solution, justified in her mind by helping a single mother. But this idea wouldn’t be a big help to a single parent anyway, with both Op and the single mother always facing the risk of the other wanting to sell and not being able to buy the other out. This would result in the need to sell = lack of security. Even if it were possible to sell a share (and it won’t be) then there would be no control over who the share was sold to = living with strangers you haven’t chosen.

It’s a poorly thought out idea and it doesn’t hold together. Op hasn’t even been able to explain in one or two posts the full plan. Perhaps that was always the intention because Op seems to like to just disagree with people raising valid points and to drip fees info which doesn’t really add up or make sense.

If it’s a real idea, it will never happen.

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