Buy a house with other people makes it more affordable.
Are you thinking about buying a house with a group of friends?
If so, what do you need to keep in mind? What are the pros and cons of doing so? And how exactly can you achieve this?
Advantages of buying a house with a group of friends
Cheaper
It can often be cheaper per-person when a property is bought with a group of friends.
The group shares the costs involved, including:
- Estate agent fees
- Legal fees
- Deposit.
You will also be able to split the cost of bills (such as utilities, renovation, etc.) once you begin living there.
Quality of life
Living with friends helps you ensure you have company you like.
Many see this as a great alternative to living with strangers or living alone.
It might also mean you get more living space.
A smaller property (such as a studio flat), will have less space and is less likely to have a garden.
Drawbacks of buying a house with a group of friends
More paperwork
Increasing the number of buyers multiples the amount of paperwork needed.
You cannot guarantee that everyone will be punctual with deadlines.
Tracking possession ownership
It can also be difficult to keep a record of who owns which items when a group of friends live together.
]In the early days, it is important to keep a clear list of who owns everything (the microwave, the television, the sofa, etc.). As new things get brought into the house, this can be more of a struggle.
Potential for conflict
Friendships change over time – and not always in a good way. Living together may also speed up this change.
People have different preferences for how tidy they keep a home, how noisy they are, etc.
These issues might only emerge when living together.
What is a joint mortgage?
A joint mortgage makes it possible for two or more people to buy a property together. This option is often taken by groups of friends who will be living together in the property.
It allows all parties to live in a more expensive house than they would otherwise have been able to afford.
Mortgage lenders also view a joint mortgage as a ‘safer bet’ than a mortgage for one individual. This is because you have two incomes to cover the repayments, rather than one.
However, if one person can’t pay the joint mortgage, they other may need to cover it.
How to Buy a House With a Group of Friends
Joint tenancy
A joint tenancy in the UK means that everyone has equal rights over the property. (It’s different to tenants in common). This means that profits are split equally if the house is sold.
Tenancy in common
A tenancy in common means that everyone owns shares in the property. And the number of shares owned can vary from person to person.
A ‘deed of trust’ will provide information on how many shares is owned by each person.
