Buying a property with family or friends

If you want to purchase a property but it seems out of reach then it’s time to look outside the box. There are several options to help you get into your own home sooner and we can talk you through them. One option is to pool funds and buy property with family or friends.

Purchasing property with family or friends is usually set up as a tenant-in-common purchase, which lets two or more people own an interest in a property. This set-up means that you’re all responsible for your portion of the debt and all jointly and individually liable for the full debt. Each individual can choose the structure for their portion of the loan to suit them, for example whether it’s fixed or variable.

Making property more affordable is the biggest advantage of purchasing as tenants-in-common. It allows you to:
  • Share the property purchase price and fees;
  • Share ongoing costs like home loan repayments, maintenance and upkeep and property management fees

There are many factors we’ll talk through if you want to purchase with family or friends. There are also some things you should consider such as the impact property finance could have on your relationships. If one person is having a difficult financial time everyone is impacted as all are liable for the mortgage repayments. You’ll need to be very clear on the expectations and possible scenarios and talk about how you want to manage any issues that pop up.

It’s smart to enter into a Co-Ownership Agreement. Among other things, a Co-Ownership Agreement sets out the terms of on-selling shares in the property, the proportion of ownership and liability for costs such as the mortgage, maintenance and upkeep. You should talk to a solicitor to make sure your legal rights are protected.

If you want to know more about purchasing property with family or friends, or any other home finance options that may suit you get in touch.