man and woman packing boxes

Buying with loved ones

by Leeds Building Society

The mortgaged property (which may be your home) may be repossessed if you do not keep up repayments on your mortgage

Buying with loved ones

An increasing number of first time buyers are thinking out of the box and buying with friends, family or a partner to help get a foot on to the property ladder.

Co-ownership is becoming an increasingly popular route to overcome the predicament that many are facing: a lack of affordable housing, rising house prices and the difficulty of securing a mortgage without a sizeable deposit.

Buying with others means you may be able to raise a larger deposit and it helps you share the responsibilities of owning a home.

What are the different types of joint ownership?

If you’ve decided to buy a property with a friend, family member or partner you need to consider whether you will be ‘joint tenants’ or ‘tenants in common’.

Joint tenants

  • Typically are couples.
  • Have equal rights and both own the whole property.
  • If one owner passes away, their share of the property will be automatically pass to the surviving owner(s).
  • Share of the property cannot be left in a will.

Tenants in common

  • Typically are relatives or friends.
  • Each owns a percentage of the property that may be equal or unequal (for example, 30% or 40%).
  • Their share of the property does not automatically go to the other owners if they pass away.
  • A share of the property can be left in a will.
Friends on the sofa

How many people can jointly purchase and own a property?

This depends on the type of agreement you choose. Up to four people can own a property together as tenants in common.

Declaration of Trust

Drawing up a declaration of trust is advisable for co-habiting friends, partners and relatives to protect each individual’s interests.

For example, you might want an official record of how much money you have each invested into the property under a tenancy in common if the amounts are of different value.

Before buying a property as a group you should seek advice from a legal professional.

What are the alternatives?

If the idea of co-ownership doesn’t appeal to you but you’re struggling to buy a house on your own there are other options.

  • Save, save, save – until you can afford a deposit on your own.
  • Help to Buy – the government backed scheme helps first-time buyers get onto the market.
  • Shared ownership – allows you to be a co-owner of a property without having to share your space with friends or family.

This guide is intended as a summary only and does not constitute legal advice given by Leeds Building Society. No reliance should be placed on this guide and you must make your own decisions, we recommend that you seek legal and/or financial advice if you have any questions or queries.