The dream of owning your own home is becoming an increasingly diminishing prospect for many would-be first time buyers given the difficulty in obtaining mortgage finance, something that continues to plague the housing market in the UK. Saving is proving tough given sparse job availability and wage caps, and the deposits required to secure mortgage finance are gradually getting more unrealistic for the vast majority. While the Private Rented Sector will obviously welcome the surplus demand this creates, an increasing number of first time buyers are thinking more laterally, choosing instead to buy a home with family or entering into a contract with friends in similar situations. The NAEA sees this as a very practical solution to secure your future.

First let me dispel the myth that buying a house with twice the number of bedrooms means the property is going to cost twice as much. That isn’t always the case, and once the deposit, bills and maintenance costs are factored in (and shared out!) it can actually make real financial sense to go down the route of joint ownership.

It could also, in theory, present an opportunity to generate some additional income. It isn’t necessary for both homeowners to live at the same property, allowing for a second bedroom to be rented out. This might work well for homeowners looking to invest in further property outside of London, where house prices might be significantly lower than the capital.

Joint ownership isn’t without its obvious challenges, which is why it’s important to iron out any potential issues before you even think about searching for your purchase – You will lead different lifestyles, have different tastes and habits, and more importantly have different levels of money to spend on a property. Ensuring you can both afford to buy and maintain a house is paramount.

It might seem too formal and over the top to consult with lawyers, but estate agents will always recommend this when a co-ownership contract is involved. You have to think about the worst possible scenario so that should it all fall through or the circumstances of the other person involved changes, that you can rely on the contract to establish where you each stand. A verbal “trust” arrangement just won’t cut sadly in what is one of the biggest business transactions you’ll ever make in life.

Researching the right mortgage for your new purchase is a must. There are deals available out there specifically for this kind of arrangement so it’s worth shopping around for the best one. It is even possible to get a mortgage nowadays by applying under a joint wage, allowing you to attain a loan of higher value.

Ensuring all documents are kept in the names of each of the co-buyers and that these are accessible to all parties is a must. Similarly, it’s good idea to open up a house account to handle day-to-day maintenance costs and other monthly utility bills. This should avoid the finances becoming the sole responsibility of one owner. These simple steps should help to keep things transparent, open and honest.


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