5 tips for buying a house with a partner or friends

Making the decision to buy a house with your partner or a friend may give you the extra boost needed to jump onto the property ladder. It’s nice to have someone to live with and will most likely mean you have a larger deposit, making your dream home more attainable.

While buying a new house is a very exciting time, the commitment can be scary if you choose to buy with a friend or a partner you are not married to. There are lots of things to take into consideration and discuss before you put down that all-important deposit:

1. Write Down Priorities

It’s important that you start by working out which priorities you have when buying a property, so that you don’t clash further down the line. Think about what your must-haves are, what you are willing to compromise on, and what’s a definite no-no for you.

You may find that while having a south-facing garden is critical for you, the person you are buying with may feel so strongly about the location you are buying in that they would be happy without a garden altogether. You may want off street parking, but your friend or partner may need to live in close proximity to public transport. It’s better to get these things out in the open before starting your house hunt.

2. Decide on Ownership

There are two different options available when it comes to owning a house with someone you aren’t married to: “joint tenants” and “tenants in common”. “Joint tenants” means you both have equal rights to the entire property, and if you die your half of the property automatically goes to the other person.

“Tenants in common” means that you can own different shares of the property and you can leave your share to someone else in your will. This is a good option to have if you have contributed different amounts to the deposit, as it makes for a fairer agreement.

3. Apply for a Mortgage

Check both your credit histories to see if any improvement can be made, and make sure the information in your credit report correctly reflects your current circumstances. You can then apply for a mortgage.

Most lenders allow up to four applicants to take out a joint mortgage, but usually only take into consideration the incomes of the two highest paid people. A mortgage lender will always insist that all borrowers are jointly liable should one stop paying their part.

4. Work Out Your Budget

Once you have a mortgage sorted out, it’s time to work out what your budget is, not only the property, but for any other expenses that come with owning a house – it’s good to write this down, starting with your income.

Think about all the bills and fees you will need to pay, and any other costs that are associated with buying a house. It’s also a good idea to keep a financial buffer, should you face any unexpected costs at any point.

5. Living Together Agreement

This legally binding document is crucial to have in place, as it protects each home owner by stating exactly what each person will contribute to the household. The agreement is drawn up by a solicitor and independently witnessed, making it legally binding. The Living Together Agreement will cover personal finances, endowment policies, ownership of the property contents, transitional arrangements, an exit plan, and any household expenses or debts.