Buying a Home with a Friend: The Right Choice for You?

With house prices rising, and deposits being out of reach for many first-time buyers without help from the bank of mum and dad, is it any surprise that some people decide to buy a property not on their own but along with a friend or family member?

Financially, this can make a lot of sense. If there is no other way to get onto the housing ladder, going in together with someone else can be a great option.

But one thing is for certain: you will have to plan it very carefully if you want it to be a success – and you will also have to be prepared for the possible downsides.

Here are some of the reasons why it can be a good idea – as well as why it may not always work out.

Advantages of Buying a Property with Someone Else

The main benefit of buying a property with someone else – or a group of people – is that it provides you with an easier way to get on the property ladder. House prices are rising rapidly in some areas of the UK, such as London, so sharing the deposit and mortgage can make it easier.

You could see joint ownership as primarily an investment. By getting on the housing ladder, you could see the value of your property go up, and you could then sell the property a few years down the line once the value has gone up, splitting the profits.

It could also allow you to move into your ideal location. Somewhere like central London may be too difficult on your own, but with someone else sharing the deposit this may be easier to do.

Potential Downsides

Of course, there are a few potential downsides to consider. The most common problem is when one of you decides they want to sell up, or when something does not go according to plan, such as one of you loses your job. What happens then?

You may fall out for reasons unrelated to the property, which could make sharing the property an unpleasant experience. You may also have disagreements over your shared responsibilities.

In addition, if one of you has a bad credit score, this can affect the mortgage terms, so this is another issue to consider when choosing someone to buy a property with.

Tips to Make It Work

If you think this may be a good option for you, there are a number of things that you can do to improve the chances that it will work out.

Firstly, you should both know exactly what you both want from the arrangement. It's not going to work if one of you only wants a short-term solution while the other wants a long-term solution.

Secondly, speak to a lawyer. Find out the worst that can happen should one of you lose your job or be unable to pay the mortgage, or simply if circumstances change. Get a solicitor to create a 'deed of trust', which should outline what happens should circumstances change so that everyone is clear.

You may even want to set up a joint bank account for mortgage payments and bill payments, which can make it easier to keep on track of your finances.

And also make sure you know who owns what when it comes to the inventory. You don't want to fall out over who owns the furniture and appliances, so make sure you are both very clear on this to avoid confusion.

Finally, find out about the options available to you. For example, a 'joint tenancy' is the preferred option where two people buy a property together, whereas a 'tenancy in common' is used for groups. The Home Owners' Alliance (HOA) has some important information about co-owning a home, so start here.

Consider All Your Options

Buying a home with someone else can be a great way to get onto the housing ladder, but never rush into a decision. Always consider all of your other options first, and only decide to go ahead with it when you are absolutely certain that this is the best option for you. However, if you do decide to buy a home with someone else, it can be a great way to buy a property, and it can often work out very well.


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