Buying a house with friends

As it has been made clear in other articles in this section, it is tough being a first time buyer and trying to buy a house.

Even with recent gentle falls in house prices taken into account, there has been nothing like a drastic correctional fall and thus many houses are still out of the budget of an individual buying on their own.

And therein lies the key to one of the creative options for those who are cash-poor, in house buying terms, for getting onto the housing ladder.

Many lenders let between two and four people buy a house together to allow them get on the ladder, and so this means that you share the mortgage for the property with those other people, based on combined salaries. So, rather than just getting a mortgage based on your own salary, you can club together with them to make one super-salary, as it were!

This sounds like a great idea. The biggest problem is, of course, those notoriously volatile things: human relationships. You might love your mates at the moment, but when you start living under the same roof and those annoying habits come around, or they take a shine to your boyfriend or girlfriend, then the gloss can soon come off.

The implication of this? That you should go into it understanding exactly what is what, and having a legal contract in place between all participants to the mortgage that will cover off all the possible things that could happen: for instance if someone wants to sell the house then what happens?

If you are buying with a partner then the option that may suit best is the joint tenant option where you own an equal stake. For those buying with friends and/or where the amount you will pay each is different, then the tenant-in-common option will probably be what you choose upon, with this you get separate shares of the house.

A deed of trust from a solicitor will clearly demarcate who owns what.

If you think through all the ramifications before entering into a 'buy with friends' arrangement, and have all the legal paperwork securely in place, then there is no reason to be overly pessimistic in the sense that this arrangement does work for many people, and is a fairly popular option for those struggling to get on the property ladder in any other way.

Buying Property

Mortgages

Buying Overseas

Tools and Resources

Buying a house with friends

House Prices