Q I live with my fiance, who part-owns a one-bedroom flat in south London through a shared- ownership scheme. He has been trying to sell the flat for two years so that we can buy a house together and start a family. However, due to issues with the fire safety of the insulation in the development, he is unable to sell the flat as no banks will lend a mortgage on the property.
The housing association with which he co-owns the property has said that he can sub-let the flat, so we can move out, then sell the property once the work to replace the insulation is finished (this has no date yet and we suspect it may take years, not months). However, this would mean that he is technically buying a second home, so we wouldn’t be eligible for the new cut to stamp duty. Our budget is already tight as we don’t have the money from the sale of his flat, so this could be the difference between being able to buy another home and not.
Is there any way I could buy a home just in my name (as I’m a first-time buyer), but with us both named on the mortgage? To complicate matters further, we were due to be married in April this year, but have had to postpone our wedding to 2022 due to the pandemic.
I’d really appreciate any help you can provide as we’re confused about what’s possible, and feel very stuck in our current situation.
A Yes there is a way you could buy a home in just your name but with both of you named on the mortgage and it’s the catchily-named (not) “joint borrower sole proprietor” mortgage. Not all lenders offer them – which is why it’s best to go to an independent mortgage broker rather than direct to a lender to find one – but they do exactly what you want them to do. However, although both of you would be jointly responsible for the mortgage payments, only you would own the property. So your fiance would have to be happy not to be registered as a joint owner at the Land Registry and so have no legal rights over the equity of the property or any profit made on the property.
It is true that – under the new rules announced by the chancellor last week – buying in your sole name and as a sole first-time buyer would bring the stamp duty land tax (SDLT) bill down to zero on a property costing up to £500,000. But the new rules also mean that for people with a second home buying jointly, the SDLT bill is less than it would have been under the old rules. For example, before 8 July 2020, the SDLT on a property costing £500,000 would have been £30,000. Since that date the SDLT comes down to £15,000 on the same purchase price. Your fiance may feel that an SDLT bill – albeit a reduced one – is a price worth paying to retain a legal claim to any property bought for the two of you to live in.
Want expert help finding your new mortgage? Use our new online tool to search 1000s of deals from over 80 lenders with the Guardian Mortgage Service, powered by L&C.