Will my shared property help me up the property ladder?

A reader from London wants to move up the property ladder, but wonders if he can hold on to his old property.

Tony Davis, myfinances.co.uk mortgage expert from Mortgage Meadow, takes him through the problem and what it means to his finances.

Daniel from London asks:

I own a flat 50/50 with a friend. We rent a room to a friend.

I have met someone special and we want to live together. We have discussed buying a place in the future.

I would like to continue to own my flat with my friend, but will also need to get another mortgage with my partner.

Can I do this?

Will a new provider give me a mortgage on this basis? Will my current provider need to be informed?

My understanding is that we can rent a room each under the current rules as long as we don't go over the tax limits.

Tony replies:

Buying a new home with your partner can be achieved; it is likely that the new lender will want to see that you can afford to cover both mortgages in the event that the payments are not maintained on what will be your investment property.

A lot will depend upon the amount of money you have to put down on the new purchase, as the greater the deposit the lower the risk is seen by the lender.

Provided that the friend you own the investment property with continues to live there and only rent one room you should not need to notify your existing lender.



If you have a question for Tony, go to the myfinances.co.uk Ask the Mortgage Expert section.

Or for more information or mortgage advice go to Mortgage Meadow.

Mortgage Meadow is an independent mortgage broker and is authorised and regulated by the Financial Services Authority