2nd July 2020

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.

In fact, co-buying has become so popular, some providers are offering multiple person mortgages, following research1 showing that the majority (60%) of millennials would take out a mortgage with friends.

Big commitment

Even if you know your friend(s) well, getting a mortgage together is a big commitment. So, 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. How well do you know and trust your friend(s)? Renting together first may be wise to ensure you’re happy to commit to homeownership.

Shared ownership

There are two types of ownership when co-buying a property: tenancy in common and joint tenancy.

Tenancy in common is usually advisable 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.

1 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.