Many people are still questioning whether or not they can afford a mortgage - or if they’ll need to continue renting or living with their parents for longer than they’d like to.
For individuals who aren’t in a position to purchase a house with a family member or partner, the idea of joining up with a friend to split the costs has become more attractive in recent years, with a 2019 survey by Furniture Choice revealing that over a third of Brits would consider buying a property with a friend in order to get onto the ladder.
Property experts at GetAgent have collated their go-to tips for anyone looking to purchase a house with a friend, to help first-time buyers (and their mates) make their way through the process as smoothly as possible. They also spoke to Sinead, a first-time buyer who recently purchased a home in London with a friend, to find out more about their decision-making process and the challenges they faced.
Sinead and Claire have been good friends for a long time and had been living together for a couple of years in a rented property before deciding to take the plunge and buy a home together. Neither wanted to live alone - or miles out of London - so buying a 2-bedroom property within Zone 2 just wasn’t feasible for either by themselves.
Sinead said: “Having two people’s savings made a big difference to the size of the deposit we could offer, and two salaries had a big impact on the mortgage we could get. Not only did it make it possible for us to get onto the property ladder, but this meant we could look at homes in a different price bracket to what we could afford alone. Even more importantly, a major pro was just having someone to share the fun (and frustrations) of house buying with!”
Tips for preparing to buy a property with a friend
Co-ordinate your diaries ahead of time
According to Sinead, their biggest challenge in the whole process was getting to viewings.
She said: “We were open to quite a few different locations across London so that meant a lot of back and forth in the evenings or weekends in order to get to the houses we wanted to see. When we found the place we ended up buying, it was a clear yes from both of us - so deciding to put an offer in was easy.”
With demand for housing so high at the moment - it’s important to view it as soon as you can make the time to. Mark out time in both of your diaries ahead of the process, so that when it comes to booking in viewings your diaries are coordinated already, and it’s easier to manage.
Pick your pal wisely
Living together can be tricky enough at the best of times, even when renting. Owning a house and being totally responsible for that property (and related financial concerns) comes with an added measure of stress, so it’s important to make sure that whoever you’re buying with is on the same page as you.
When asked if she thought renting together first helped boost her confidence in buying a house with her friend, Sinead said: “Yes I think it always helps."
She adds: "Though I still would have gone ahead with it even if we hadn’t already rented together. We’ve known each other for 20 years, so we’ve spent a lot of time with each other! We were already confident that living together wouldn’t be a problem. |
At this point in my life, I wouldn’t want to be living alone either, even without lockdowns that forced a lot of us into isolation over the last few years. Having the social benefits of living with another person is always something I'd see as a huge bonus of buying with someone else, whether that’s a friend, family member or partner.”
Talk money, even if it feels uncomfortable
Many people find talking about money extremely uncomfortable, but it’s important to discuss it upfront and get everything out in the open before you commit to purchasing a house together - just as you would if you were purchasing with a family member or partner. You’ll need to talk about your credit ratings and even discuss opening a joint bank account for things like your mortgage payments and bills.
If you’re not splitting everything 50/50, get the right legal paperwork
If you’re splitting everything straight down the middle, a verbal agreement and understanding can be appropriate, however, things can get complicated when one person puts in more than another, and when it comes to items too - not just money. Decisions like whether you want to be tenants in common or joint tenants will impact you later down the line when it comes to potentially selling, and we’d recommend drawing up legal documents like a cohabitation agreement, or a deed of trust early on, that set out clearly how things within the property are divided.
Sinead says: “There were no extra legal decisions or paperwork than there would’ve been on our own, the only big legal decision we had to make was whether we wanted to be joint tenants or tenants in common - which is one you still have to make if you’re buying with a partner or family member anyway.”
Don’t let the fact you’re buying with a friend put you off from having those tricky conversations, it’s a very similar process to buying with a family member or partner - so get your ducks in a row and ensure you make the right call for what will suit you later down the line.
Talk through all your ‘what ifs’ before you commit to buying together
There are many potential scenarios that could throw your arrangement into disarray in the future, being upfront and honest about what you want from the property and your long-term plans will help to avoid any unwanted problems from popping up later down the line.
Make sure you talk through what happens if one of you wants to sell, move out or stay when the other one doesn’t want to. Before you’ve even purchased the house, knowing what you do and don’t want in your potential property is vital too. Chat through what’s most important to you first, is it location or size, and what are your must-haves - being close to a train station or having a parking spot?
Sinead concluded: “Be really clear upfront about what each of you wants, what you’re happy to compromise on versus what’s an absolute must-have. It’s also worth chatting about what your long-term plans are and what you’d do if one wanted to sell and the other didn’t. It’s much easier if you are clear on that from the start.
"House buying is really exciting, but it also comes with a whole lot of admin and decision making. Having someone to share both the exciting things and the more boring bits with is a real bonus!”
Colby Short, Co-Founder and CEO of GetAgent, comments: “Getting onto the property ladder is no easy feat, and it can be even trickier if you’re going it alone. Buying your first home is a massive milestone for anyone, and it can feel like a very daunting challenge to first-time buyers. With loneliness at an all-time high, along with the rising cost of living making it harder than ever to own your own home, we are seeing more people than ever opt for home ownership with friends, instead of partners/family members.
Buying with a friend is a fantastic way to bypass the financial and emotional stress of going it alone, with two sets of deposits, two salaries and two heads to make the decisions. Whether it helps you step onto the ladder at all, or just makes owning your dream home more manageable, we hope it’s a route that continues to help more people own their own properties.”
