It does sound like a good idea which would help your daughter out. As mentioned above you need to speak to a solicitor but maybe the way forward would be for you to mortgage your own home, buy the flat in your own name and get your daughter to pay you rent equal to your mortgage payments. Then you haven't got any worries about a boyfriend / lodger getting a claim on the property and you would be covered if you fell out with your daughter.

Then when she is earning enough and saved enough for a decent deposit (or there is some equity) you can do the transfer over to her.

There should be no tax consequences as long as the rent is not more than your mortgage payments and it wouldn't matter that the loan is actually secured on your house and not the flat.

Thanks Hunkster

I forgot to mention that I am an electrician to trade and my main job is a building maintence technician. As you pointed out who pays for the flatmate when they are not there so that would be me then as my thinking is by helping my daughter now this would be better than going gaga i the future and the local council taking my house to pay for my care.

Also I have spoken to a lender who says I can get a 25 year mortgage at my age I was also upfront withem telling them that this would be a 5-10 year timescale so that when the house built up enough equity and part of the loan had been repaid then my daughter would be in a position to get her own loan when she built up 25-30% equity.

Once again many thanks

andy001:

I don't think you would be able to get a mortgage at the moment, as lenders are being VERY risk adverse. You should go to see an Independent Mortgage Broker, who will run through your details and see if a lender is willing to agree to a mortgage in principle. If so, how much would the mortgage be and what would the term be. Some may only lend up to 15 years i.e. when you reach 65.

Also as Margot suggested, you should see a solicitor to obtain advice about what issues you need to consider. Would you be liable to pay any tax on any profit you earn on the property if it is sold in the future? Would you have to include any rent paid to you in your tax returns?

Your daughter would have to deal with all issues, council tax, maintenance charges for the flat, all other bills and collecting her flatmates share of these as well as rent. What if your daughters flatmate does not pay for awhile or she does not have a flatmate during some periods? Your daughter may then not be able to pay you the full monthly amount, so you would have to find the shortfall to meet your mortgage payments. These would be on top of all your other expenses for your own house. You could quite easliy get yourself into debt if you did not have savings to cover such periods.

I think you would be better looking at other options. Could you lend your daughter a smaller amount, so that she can buy a property under the governments homebuy shared equity scheme?

Huckster

good point margot yep already thought of the life insurance and living in Scotland where "common law" man and wife may kick in I will make sure she is aware of the pitfalls.

thanks

I think it sounds like a good idea to help out your daughter, and if you are never likely to fall out it could work. However, do be careful of other, third parties. I put my name to the mortgage on my daughter's house, so that it was in our joint names as they would not have lent her the money on just her salary. Then the boyfriend moved in. After seven years, although the house was in her sole name by then, he managed to claim half the equity simply for living there. They had split up and he refused to move out until she had remortgaged and paid him off.

If your daughter gets a flatmate, be sure that it is a legal agreement that the flatmate is a tenant, and nothing more. I would strongly advise you to seek the advice of a solicitor before going ahead.

She should also have life insurance to cover your contribution. It is not something that you want to think about, but what will be your position if anything happens to her? I would also make sure that the flat is in your names as joint tenants.

I am a 5o year old man in full employment and I own my own house outright (value 180k) so I have an idea to help my daughter get on the housing ladder.

I hope to take on a loan of £110000 on my house and buy my daughter a flat for the same ammount. My daughter cannot afford to do this on her own as even if she had a deposit the repayments would be about £700-£750 pm yet via my house the loan would be £520-£560 as it would be only be 60% of the value. My daughter would get a flatmate ok she lives in Edinburgh and after 5 years I would get her to transfer over the ramaining debt to herself thus paying off my loan.

So I welcome any feedback or advise (good or bad)