How Hard is it to Buy That House?

I want to help myself in climbing the housing ladder- in this way I can enjoy the benefits of creating wealth and avoiding rental payments every month; in doing so I had to understand the concept of conveyance.

My intention is to jointly purchase a property costing £150,000. I would contribute £50,000, while my partner tales out a repayment mortgage for £100,000. I do not want any liability for the mortgage and do not want the others to be able to access my invested capital, but nor would my partner pay me rent or interest.  I was investigating the possibility of the idea being put into action.

After researching in the Financial Times, I realized that I could contribute £50,000 to the purchase of a property without the need for you to charge interest or rent to the other contributor towards the house purchase. The property would be held as "tenants in common" (rather than as "joint tenants"), to enable you to control the passing on of your share on your death. I would also have to record your separate interests in the property by way of a declaration of trust, which should cover matters such as how decisions on the sale of the property are to be made.

It should also be possible for my partner to take out a mortgage in their name, but the lender will require that we give a joint charge over the property. If the property falls in value, my share could be at risk under the charge if the others don’t keep up on payments. Unless I guarantee the mortgage, I wouldn’t be liable for any interest payments, except in the event of default and repossession.

Realizing that my plan was feasible I decided to check with some of my other friends, who purchased a home with their partners as well. Two of my good friends selling their flat, and the intermediation of a solicitor would definitely be helpful.

My friend Chris and his girlfriend jointly own a second home, a London flat bought 8 years ago. Chris is a higher-rate taxpayer his partner is a standard-rate taxpayer. They are thinking of selling the flat and expect to make a profit of £150,000 between the both of them. Chris would like to transfer his half of the property on Lucy’s (his girlfriend) name. Their main concern was that if I his half of the property was transferred to his girlfriend shortly before selling, if it would it result in a significant reduction in our total CGT liability on the profit.

Francis Nation-Dixon, partner at Adams Remers solicitors, says you could transfer your half-share of the flat to your wife, either using a conveyance from both of you to her name, or by a Declaration of Trust passing the beneficial interest.

What does this really mean? Conveyance is the legal transfer of property from one owner to another. The conveyance process, if properly carried out by conveyance solicitors, ensures that the purchaser actually owns all the property, land and rights that have been paid for. ?Selling Your House (conveyance) i.e. the legal process involved in selling your house is relatively straightforward.

Taking this into consideration, I decided that I would implement my plan of purchasing Chris’s flat, which would now be in the ownership of his girlfriend, Lucy.