Buying a House With Friends and Family
Peter Bolton King, Chief Executive of the National Association of Estate Agents (NAEA) says that "at a time when a lack of mortgage finance is hindering first time buyers, opting to buy with a friend or relative can represent a sensible way of getting into the market..... By combining in this way it is possible to attain a mortgage of higher value, due to the increase in income afforded by applying with a joint wage."
But the NAEA advises to consult a lawyer about putting in place such a co-ownership contract as whilst there should naturally be a high level of trust before embarking on this, it is advisable to also agree in advance what will happen if one owner's circumstances change.
Mr King also explains that "twice the number of bedrooms doesn't always mean twice the cost, so sharing the price of a home, and the deposit - as well as bills and maintenance costs - can make real financial sense. Importantly, both owners don't necessarily need to live in the property - a person living in London could invest in a town with lower house prices with a friend who lives there, and rent out the second bedroom."
"However, for anyone considering entering into a joint ownership I would stress the importance of a transparent, open relationship between all parties involved to ensure a smooth purchase and ownership process. Remember, this may be your home, but it's also a business transaction and one of the biggest decisions you'll ever take."