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Aston Lawyer
Aston Lawyer, Solicitor
Category: Law
Satisfied Customers: 10731
Experience:  Solicitor LLB (Hons) 23 years of experience in Conveyancing and Property Law
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I want to help my niece who has moved to my area of the country

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I want to help my niece who has moved to my area of the country recently and has been renting flats/ house shares for too long in my opinion - rent would be same as a small mortgage.I would like to help her get on the property ladder etc. Unfortunately she has no saving so wont get a mortgage. I would buy a small house/ flat for cash for her provided she then buys it from me at face value over x period of years. Can I do this - it would be done through a legal route and contracts signed etc.
Hello and thanks for using Just Answer.

My name is XXXXX XXXXX am happy to assist you with your enquiry.

You certainly could purchase a property and have a side Agreement that she pays £x per month for X years in order to pay you back. However, from your point of view, there would be no way that you could force her to make the necessary repayments if she became unable to meet those payments some time in the future. Your investment in the property would of course be safeguarded in such a situation in that you would of course be the legal owner of the property until the final payment had been made.

An alternative would be to gift her a Deposit to enable her to buy your own property with the assistance of a Mortgage. The only practical problem with this would be that she would have to declare to the Mortgage Company that the Deposit had been "gifted" to her and they would want you to put in writing that it was indeed a gift, as opposed to a loan. If you were prepared to do this, you would then have to come to a separate arrangement with your niece that she repaid you, although this would not be legally binding in the sense that the money you gave her was in theory a gift. You would therefore run the risk if repayments were not made, then you could potentially lose the money you had given her.

As another option, your niece could look at purchasing a part buy/part rent property ( called a Shared Ownership property) if there are such properties in your area. Such a property may well be within her financial budget and she would only have to provide a small deposit.

Your initial option may be the best way forward, but you would have to bear in mind that if for unforeseen circumstances, she was ever unable to continue with the monthly repayments.

I hope this assists and sets out the legal position to you.

Please let me know if you require any further clarification.

Kind Regards
Customer: replied 3 years ago.

"FOR ASTON lAWYER" Thanks for the answer, but I need to clarify one point - I was hoping to "gift" a large deposit, but as she wont get a mortage at present its probably a non runner? If my first option ( buy it outright and she buys it back) how would she be recognised as the part owner as her percentage of the house increases ie she pays eg £8K per year to me how would thay be legally recognised that she now owns 5% of the house etc per year so secone year she would own 10% etc etc?

Hi John,

Thanks for your reply.

As regards "gifting" a Deposit, provided your niece explained to the Bank/B society that she is receiving the deposit from you, this should allow the Mortgage to proceed. Alternatively, you could give the Deposit to your niece now so the money is sitting in her account, and then she go to the Bank/B Society and explains that she has the Deposit.

If you were to go ahead and purchase the property in your name, the separate Agreement detailing her repayments will also detail that you hold the property on trust for your niece for the appropriate percentage according to the amount of repayments she makes. From your niece's point of view, a "Restriction" can be placed on the Deeds to protect her financial interest in the property, and which would also prevent you from selling the property without your niece's consent.

I hope this clarifies matters.

Kind Regards
Aston Lawyer and other Law Specialists are ready to help you

Hi John,

Can I be of any more assistance to you?

Kind Regards
Customer: replied 3 years ago.

No more assistance required - thanks fo your responses.