These days, homeownership is simply unaffordable for many young people. That’s why more and more aspiring buyers are deciding to co-buy a property with friends via ‘Shared Ownership’.

Co-buying has become so popular that, some providers are offering multiple person mortgages, following research* showing that the majority of millennials (60%) would take out a mortgage with friends. Even if you know your friend(s) well, getting a mortgage together is a big commitment.

Here are some things to consider before taking the plunge:

Think about renting first

Pooling your finances and sharing a living space can put strain on relationships. Renting together first may be wise to ensure you’re happy to commit to home ownership.

Shared ownership

There are two types of ownership when co-buying a property: tenancy in common and joint tenancy. Tenancy in common is usually advised for friends purchasing together; it allows them to each own a quantified share of the property and permits them to leave their share to other parties in their will.

Cohabitation agreements

These agreements outline who owns what; how mortgage and other payments will be split; how assets acquired during the tenancy will be owned and how assets would be divided were the parties to go their separate ways.

*M&S Bank, 2018

As a mortgage is secured against your home or property, it could be repossessed if you do not keep up mortgage repayments.

Talk to us

If you’d like to get professional advice on mortgages, whether it’s for a shared ownership or not, we’d be happy to help you. Clifford Osborne are Independent Financial Advisors (IFA) based in Eastbourne, East Sussex, offering mortgage advice, early retirement advice, pension advice and more. Our clients often come from Uckfield, Lewes, Brighton, Tunbridge Wells, Hastings, Bexhill, Newhaven, Seaford, Crowborough and further afield. Please contact us to arrange a free initial mortgage review.

Please read our VoucherFor reviews here.

The value of investments can go down as well as up and you may not get back the full amount you invested. The past is not a guide to future performance and past performance may not necessarily be repeated.

It is important to take professional advice before making any decision relating to your personal finances. Information within this blog is based on our current understanding of taxation and can be subject to change in future.

It does not provide individual tailored investment advice and is for guidance only. Some rules may vary in different parts of the UK; please ask for details. We cannot assume legal liability for any errors or omissions it might contain. Levels and bases of, and reliefs from, taxation are those currently applying or proposed and are subject to change; their value depends on the individual circumstances of the investor.

The value of investments can go down as well as up and you may not get back the full amount you invested. The past is not a guide to future performance and past performance may not necessarily be repeated.

If you withdraw from an investment in the early years, you may not get back the full amount you invested. Changes in the rates of exchange may have an adverse effect on the value or price of an investment in sterling terms if it is denominated in a foreign currency. Taxation depends on individual circumstances as well as tax law and HMRC practice which can change.

The information contained within the blog is for information purposes only and does not constitute financial advice.

The purpose of the blog is to provide technical and general guidance and should not be interpreted as a personal recommendation or advice.