My partner and I are considering buying our first house together. We
plan to take out a
mortgage of £135,000. Although I have £26,000 to put down as a
deposit, she doesn't have anything.

We plan to make equal mortgage repayments each month. But my question
is: what should I do to 'protect' my deposit if we break up in the
next two to three years and sell the house? It wouldn't seem fair to
divide the proceeds 50/50, considering the capital I put in.

She agrees with this. I'm really looking for a few back-of-a-napkin
outlines of how a fair arrangement would work. Bear in mind that I 
want the house to be hers as well (after all, she will be making equal
payments each month) but I just feel I should have something in place
'protecting' my deposit.

Obviously marriage would change everything, but I'm not getting down
on one knee yet. So in the meantime...what do you think I should do?

Dear scooperuk-ga,

You are quite right to consider what would happen to your deposit if
your relationship did fail. In fact there are other things that should
be considered when buying a house together.  What if one becomes
unemployed and cannot pay the mortgage? What happens in one of you
dies? What if only one wants to sell the house when you break up?

I notice that you quote UK sterling, so this answer is applicable to
England. The law in Scotland and Northern Ireland may be different.

Your conveyancing solicitor can arrange for you to be owners of the
property as joint tenants 50:50 share, or tenants in common: 65:35 (or
whatever share is applicable). That may solve the problem of the
deposit and it will also mean that as an investment, the deposit will
benefit from any potential increase or decrease in the properties
price.

However, it is recommended that you either draw up a Cohabitation
Agreement or have a Solicitor draw up a Deed of Trust which will set
out exactly the financial terms of the cohabitation. You are also
advised to draw up separate wills and perhaps a power of attorney
should one of you become incapable, perhaps through a serious
accident, of making financial decisions. It may sound like an
unnecessary expense but it will save a lot of stress should your
relationship fail.

There has recently been a campaign to try and address the issue of
providing protection for couples deciding to live together. The
LivingTogether campaign is funded by the Department for Constitutional
Affairs. Their web site sites provides comprehensive information and
leaflets on living together. They also include a  template
Cohabitation Agreement.

?Advicenow is an independent, not-for-profit website providing
accurate, up-to-date information on rights and legal issues.?

?Advicenow is a project of Advice Services Alliance, the coordinating
body for independent advice services in the UK. ASA members including
adviceUK; Citizens Advice; DIAL UK; Law Centres; Shelter and Youth
Access are our main partners along with other leading advice and
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Advicenow is funded by the New Opportunities Fund; the Legal Services
Commission; the Invest to Save Budget and the Department of
Constitutional Affairs.?

http://www.advicenow.org.uk/go/livingtogether/index

These two articles may also provide you with some additional
background information.

?An unmarried couple only have formal legal rights when they buy a
home together if they have been agreed via a lawyer in a written
document - such as a Deed of Trust. This sets out in black and white
exactly what should happen if they split, or should one of them
die.[?] A Deed of Trust can cover every eventuality. It can state what
proportion each you own of a property and what happens if
relationships break down or if one of you dies. It can also include
details such as who is responsible for paying the household insurance?
http://www.guardian.co.uk/guardian_jobs_and_money/story/0,3605,1552498,00.html

http://www.ivillage.co.uk/relationships/couple/living/articles/0,,148_186061-1,00.html

These two books may also be of use.

Cohabitation Rights Guide  by Philippa Pearson 
http://www.amazon.co.uk/exec/obidos/ASIN/1902646525/qid%3D1125649478/026-5625385-0100448

The "Which?" Guide to Living Together ("Which?" Guides)  by Imogen Clout 
http://www.amazon.co.uk/exec/obidos/ASIN/085202990X/qid=1125649503/sr=1-1/ref=sr_1_2_1/026-5625385-0100448


 I should also refer you to the disclaimer at the bottom of this page
regarding this answer.


I hope this answers your question. If it does not, or the answer is
unclear, then please ask for clarification of this research before
rating the answer. I shall respond to the clarification request as
soon as I receive it.
Thank you
answerfinder

Search strategy
mortgage unmarried "deed of trust"
://www.google.co.uk/search?hl=en&q=mortgage+unmarried+%22deed+of+trust%22&spell=1

Every jurisdiction differs, but if you are buying property in
California you can protect your deposit (or down payment) with a deed
of trust (or its equivalent in your area). Your girlfriend can sign a
note with agreed upon interest rate and due date, or you can both
agree to refinance when the property increases in value. In
California, this note secured by a deed of trust must be notarized so
you can record it whenever you want.You don't have to record it
immediately but it should be recorded sometime in the future to
protect your interest. If you are not from the US, perhaps you have
similar instrument that will have the same effect. Good luck.