Buying With Friends or Family: What You Need to Know Before Co-Owning a Property

Getting on the property ladder is tough, especially with rising house prices and different deposit requirements. That’s why more people are teaming up with friends, siblings, or even parents to buy a home together. While co-owning can be a smart way to make homeownership more accessible, it also brings with it a few important legal, financial, and personal considerations.

If you're thinking of buying a property with someone else, here’s what you need to understand before signing on the dotted line.

Why Buy With Someone Else?

For many first-time buyers, affordability is the main motivation. Sharing the cost of a deposit, mortgage repayments, and household bills can make owning a home more manageable. You might also be able to afford a larger or better-located property when combining your borrowing power.

For parents, helping a child onto the ladder might involve jointly buying a home rather than gifting a deposit. Similarly, couples who aren’t married may look to co-own a property to avoid relying on one person’s name or income.

Whatever your reason, it’s important to approach co-ownership like a business deal. Clear expectations and legal protection are essential from the start.

Choosing the Right Ownership Structure

In the UK, there are two main ways to own property with someone else: as joint tenants or tenants in common.

• Joint Tenants: This is often used by couples. Both parties own the whole property equally. If one person dies, the property automatically passes to the other. However, you can’t leave your share to someone else in a will, and if you split, the equity is typically divided 50/50, regardless of individual contributions.

• Tenants in Common: This structure allows each person to own a specific share of the property. These shares don’t have to be equal. You can also leave your share to someone else in your will. This option offers more flexibility and is often better suited to friends, siblings, or parents co-owning with children.

Discuss the pros and cons with your solicitor to decide what works best for your situation.

Get a Deed of Trust

A Deed of Trust (also called a Declaration of Trust) is a legal document that outlines how much each person owns, what happens if someone wants to sell, and how money will be divided if the property is sold. It can also cover things like how bills and maintenance costs are shared, and what happens if one person wants to move out.

This isn’t a legal requirement, but it is highly recommended. It provides clarity, helps prevent disputes, and protects each person’s investment.

Consider the Risks

Buying property with someone else means your finances are tied together. If one person loses their job, struggles with payments, or wants to sell before you’re ready, it can impact you both.

Here are a few risks to consider:

• You are both jointly liable for the mortgage. If one person stops paying, the lender can chase the other for the full amount.

• A change in personal circumstances, like a relationship breakdown or job relocation, could force a sale.

• If one person wants to remortgage or release equity, you’ll need to agree on the decision together.

Having those conversations early on, even if they’re awkward, can save a lot of problems down the line.

Think About the Future

Before buying together, think long term. What are your plans if one person wants to move on in a few years? Will you sell the property, buy them out, or let the home and share the income?

It’s a good idea to have a written agreement in place for potential exit strategies. This could be part of the Deed of Trust or a separate document. You should also review your plans every few years to make sure everyone is still on the same page.

Legal and Financial Advice is Key

Always speak to a solicitor before co-purchasing a property. They can explain your rights, help you decide on ownership structure, and draw up the appropriate legal documents. A mortgage broker can also help you find a lender that accepts co-buyers, especially if you're not a couple.

Make sure you’re all clear on what you’re committing to. Buying a home is a huge step. Doing it with someone else can be a great option, but it needs to be handled carefully.

Please get in touch in you would like to discuss a mortgage.