Q I bought my first house with my now ex two years ago. He had a big deposit, while I was only able to contribute to the monthly mortgage repayments. We had a declaration of trust drawn up to apportion fixed shares, based on the size of our deposits and our mortgage contributions. I therefore own a very small share of the house.
He broke up with me six months later after a nightmare few months of renovations but we still own the house together despite not having any communication at present. He lives there and pays the mortgage currently while I have had to move out.
He intends to buy me out at the value of my contributions to the mortgage during my short tenure. I am then left with about £10,000, which I reason is more than I would have if I had been renting the whole time.
It’s all a bit of a mess and I would never have foreseen myself being in this position when we signed for the house. I have a good salary with no debts and have been saving in recent months, and I would like to have my own place once he has bought me out. I am concerned that I am no longer considered a first-time buyer– are there any schemes that could help someone like me?
A Correct me if I’m wrong but I’m getting the impression that you’re not convinced that your ex’s approach to buying you out is entirely fair. And I think you could have a point. It is not down to your ex to decide what he will pay you for your share of the property as the decision was made when you had your deed of trust drawn up. As a legally binding document, the declaration of trust cannot be ignored when coming to a conclusion as to how much you should get either on being bought out or after a sale of the property. It does not allow either of you to change your minds about how you will divide the money from the property.
It would be worth your while to go back to the solicitor who drew up the declaration of trust for advice on applying its terms to your current situation. If he or she agrees that what your ex proposes is in line with what your trust document says, then at least you will know you are not being shortchanged.
I’m afraid that you are right to be concerned that you are no longer considered a first-time buyer because you are not. However, although this means that you won’t have access to the help-to-buy equity loan scheme, which is now exclusively for first-time-buyers buying a new-build home, you can make use of the government’s new 95% mortgage guarantee scheme. And provided your household income is below £80,000 (£90,000 in London) and you can’t afford to buy a property on the open market, you could also be eligible to buy a shared-ownership property.