A girl i have been seeing (and currently live with) has a council flat in Islington, it is worth £350-£400k. She wants to move further north (Enfield Chase) as there are better schools for her daughter who will be starting secondary school next year.
I moved in with her a year ago as it is closer to my client co. We both acknowledge the relationship isn't a long term one, as i am looking to move abroad evenutally.
We are eligible to buy her flat with a right to buy discount of £100k, but she does not have the means to finance it. What i have suggested is:
1)We buy her flat as joint tenants, i own 95% she has 5% (charge registered with land registry and deed of trust drawn up).
2) I buy a BTL mortgage on a house in Enfield Chase which she rents off me for nothing.
3) I get a "consent to lease" on the mortgage on the flat and rent it out for around £2k a month (amazingly no restriction on this with islington council, i have confirmed). this covers the mortgage on both properties.
4) in 5 years time i buy her out of the 5% on the flat
My question is, during the 5 years she is renting the house off me for nothing, can i offset the mortgage interest of both the flat and the house against what would only be a rental income from the flat?
I moved in with her a year ago as it is closer to my client co. We both acknowledge the relationship isn't a long term one, as i am looking to move abroad evenutally.
We are eligible to buy her flat with a right to buy discount of £100k, but she does not have the means to finance it. What i have suggested is:
1)We buy her flat as joint tenants, i own 95% she has 5% (charge registered with land registry and deed of trust drawn up).
2) I buy a BTL mortgage on a house in Enfield Chase which she rents off me for nothing.
3) I get a "consent to lease" on the mortgage on the flat and rent it out for around £2k a month (amazingly no restriction on this with islington council, i have confirmed). this covers the mortgage on both properties.
4) in 5 years time i buy her out of the 5% on the flat
My question is, during the 5 years she is renting the house off me for nothing, can i offset the mortgage interest of both the flat and the house against what would only be a rental income from the flat?
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