What percentage of ownership would be mine?

[Anotherusernamethisweek]

Please help me be a bit informed before we proceed to seeing a solicitor.

I'm buying a house with my partner. The purchase price is £350k. We have a mortgage arranged for £221k and I will pay £129k from the sale of my house.

I will also pay the stamp duty and the legal fees and moving costs. Approx £10k

The house needs full renovation and I have £80k to put towards this.

Partner has no assets and no savings.

There is plenty of scope for adding value as finished houses of similar size and spec are selling for approx £600k in the area. Although we intend it to be a 'forever home'.

So obvs my share will be half of the mortgage plus my initial contribution of £129k. Can I have the other money I've spent on the property taken into consideration as a percentage of the ownership? How does it work?

I'm not going into this assuming our relationship won't last but if it doesn't, will I essentially be giving him half my £80k investment in the property? And what can I do about the fees and charges, should he pay half or can I tag it into my owned percentage.

Any advice gratefully received.

Total cost = £440k
(House + costs + Renovation)
Assuming tenants in common plus your contribution is buying a % and that you are paying the mortgage half each.
£129K +£10K +£80k + 50% of £221k = £329.5k
Your % = 74.8%. Your DP = 25.2%

@Marmight thanks. That's kind of what I was thinking but I didn't know if it was more complicated than that. As the renovation costs weren't part of the purchase price.

You can agree whatever split you like between you and your partner.

He'd obviously be encouraged to take his own legal advice and would likely need a separate solicitor if you were looking for anything more complicated than a tenants in common situation.

@Anotherusernamethisweek
I don't think it matters that the renovation costs are not part of the purchase costs. You both know that you are going to spend the money on the house and you will both gain from doing the renovation, both in living environment and monetary gain on the house in the long run.
As an OP has said, it does come down to what you agree on but personally, if the renovation costs aren't part of the agreement, don't put the money in if you don't want to give £40k to your DP. It will take quite a while before he saves £40k to put an equal amount into the renovations. Is he actually able to save at all?

@Marmight in all honesty we will probably need more than the £80k so he will more than likely be contributing to the renovations in the future. I'm assuming we'd contribute 50/50 to further costs. He will also do far more of the physical stuff than I could do if we don't have professionals in such as tiling and decorating, kitchen fitting etc.

DH and I (late marriage) started off at 80:20 to reflect who put in what. We are tenants in common at those ratios, expressly to protect my equity if we split. But now we've been married a while if we did split I'd feel it would be fair to make sure he had enough to buy a small property of his own.

The point being that as time goes on you can rebalance if you want to to reflect what you feel is fair later on.

If DP has no assets and no savings, does he have enough income to support 50% of the mortgage?

If he's a DP and not DH then I think I'd be looking at taking this on myself, owning the house 100%. Could you cancel or delay the extension and just borrow less?

Ask your solicitor about tenants in common and joint tenancy.
HMRC

If you were keen to protect your assets, I would ring fence your 189k deposit plus the 80k and the 10 k costs (meaning you would own around 63% of the total asset) and would receive 63% of the profits upon sale as well as your deposit back.

It depends on your future plans, too, if you plan to marry and have children, if you have any existing children or step children too. In the event that you have your own child(pen) tenants in common would be the way to go.
Regarding the work and mortgage payments you could suggest a similar split in the mortgage payments, would I be right in thinking you are the higher earner too?

@filka good question. The bigger mortgage and splitting costs 50/50 would leave me better off than our current arrangement per month but his costs would triple!

@winnerwiner yes I do want to ring fence my money for the children. We have a 2 year old together and I have an adult daughter.

The idea of buying together is so that it's our house not my house. I am on board with this but if things did go tits up I don't want him swanning off with my hard earned cash 🤣 maybe I'm not on as on board as i thought I was or is it normal to feel like this? I've never bought a property with anyone else before only on my own.

The house we are buying wouldn't be worth buying without a pot of cash to do the work. It's a state. I could get about £180k mortgage on my own but I'd be halving my Reno budget. And it wouldn't be his house which is the point of all this.

I am the higher earner 😬 we are both self employed.

I think it's very sensible to be cautious and practical about the money side. It can still be the right thing to do but you don't want him swanning off with money he hasn't contributed if it does fall apart, even though hopefully it won't.

You may also want to be able to stay there with DD even if he leaves, so want to ensure the finances work to allow that if possible

Hi OP, don’t worry it is completely normal and sensible. You’ve got to protect yourself in this life. I am similar to you in that I put in most of the deposit, although we split half the fees. We had a declaration of trust drawn up and just sat down together and agreed how to split it, essentially we both get back the amount we put into the property, and then split any profit 80/20 based on what we put into the property.

I'm also in a similar position. We're buying a house together but I'm putting in the deposit, all fees, and also £40+ towards reno once we move. I will also be paying more towards the mortgage each month. However, we're not sure if circumstances might change and the mortgage split changes further down the line, so we're going with a deed of trust with floating shares, which means we don't need to decide on a fixed percentage, and instead our share gets calculated depending on how much money we've put in over the years. This seems fair to us both, and I was quite clear I wanted something legally binding drawn up considering the disparity in initial sums being put forward. I wouldn't have been comfortable skipping this, even though I'm not anticipating separating any time soon!

@LennyFitz how did you decide to pay more towards the mortgage?
I was thinking we'll go 50/50 on the mortgage and the running costs, would this affect ownership percentages?
I do earn more, but I'm not a high earner.

Speak to your solicitor about putting in place a declaration of trust to protect your share of the property.

@Anotherusernamethisweek I've been paying a higher share of rent for a couple years already anyway, just due to our income difference. For the house we're buying though, I wanted to get a shorter mortgage term than my partner could afford, due to the higher monthly costs. I can afford it though, so I'll just be paying more again, to make up the difference. The split will be roughly 35/65 to start, but that might change over time (I'm contracting currently but might go perm... might take time off for a bit.. he might get a paid better paid job etc), so due to the uncertainty the 'floating' deed of trust seemed a good idea. If you're 50/50 on mortgage payment though that probably makes things easier and fixed percentage shares would work ok for you.

I should point out I'm no expert in this area :) I just googled this type of scenario a few weeks ago, and read up on a few options. We have an appointment booked with another solicitor in a couple weeks time to discuss. Our solicitor handling the house purchase couldn't deal with this more complex agreement (surprisingly!) but recommended another firm to us.

The problem with going 50:50 on ongoing costs is that this doesn't reflect the initial balance of 75:25. So if you set the share at 75:25 to start with then DP will be losing out if he then contributes 50:50.

Agree with PP to ring-fence your initial contribution and then contribute equally or revisit the agreement.

Thanks for everyone's wise words.

I feel like this is turning into an AIBU 😂

DP and I had a discussion the other night about the house purchase, there's a problem with deeds and we need to speak to the solicitor so I mentioned that we need to draw something up about our ownership percentages as well and, OMG, he totally went off on one saying I don't trust him and we're going 50/50 on the house.

So not really sure where to go from here, he said if we do split up I can have my £200k back and we'll go 50/50 on the rest. But I feel like my £200k is going to be worth a lot less in say 20 years so that's not really fair either.

He says he's going to do ALL the work and be paying for things so he thinks we should split 50/50.

Opinions please?

(He's not going to be doing ALL the work because he's not an electrician or plumber or gas engineer or carpet fitter or plasterer! He might do some painting and maybe install the kitchen cabinets, I can also decorate but will most likely be looking after OUR child while he does a some things)

Oh dear, that's not a good reaction. I'd sit him down and say this is the cash I'm putting in and this is the value of the work we're both doing (childcare counts as well as manual labour). If he's still saying 50:50 you have a bigger problem than just the split of shares.

@Isonthecase I agree! I've said to him this had made me think twice about the purchase already!

How would you even go about measuring how much manual labour equates to in terms of a share of property! I agree he will be doing more manual stuff than me because I don't have those skills and I've got a toddler to look after. (His toddler)

I want a return on my investment should we split up. As does he. I can see his point but I have no idea how to work out what's fair.

Yeah...no.

Your suggestion of the split is wise, I don't know the mechanism for ring fencing a deposit but I'm sure if you speak to a solicitor (your own, not the one dealing with the purchase) they will come up with a solution.

That was a very discouraging reaction from your DP. He wouldn't be able to buy a house at all if it wasn't for you.

I would say you doing child care while he paints and decorates is a fair split of labour. Go 50:50 on materials and no one owes the other anything for reno costs.

Seems you can do everything he can , so ge doesn't get paid by you if you provide tge childcare while he paints or vice versa.
Protect your interests.
Or get married and he gets his 50% .
In his interest to get married here.