Getting on the property ladder can be challenging, with many people now choosing to buy a house with friends. While there are benefits to doing so, there are also some potential pitfalls to avoid. If you are considering buying a house with friends, here are some advantages and disadvantages to be aware of.
Advantages of buying a house with friends:
Larger budget
With two or more people buying a house, you may be able to afford a more expensive property than if you were to purchase it alone. It also means you may be less reliant on financial help from your family. According to City AM, people stepping onto the property ladder are relying on financial gifts more than in the previous decade.
Higher deposit
With more people chipping in, you could be able to put down a larger amount. This will enable you to access better deals on mortgages in addition to making buying a house more affordable.
Shared outgoings
Part of owning a house means paying monthly bills. When sharing with friends, your household bills are split between you, saving you money.
Disadvantages of buying a house with friends:
Disputes
One of the main disadvantages of property buying with friends is what to do should a dispute arise; for example, if one party cannot meet their share of the mortgage payment, the other tenants will be liable.
Legalities
With multiple people buying a property, there is more to sort out regarding who owns what share. You may be joint tenants, whereby ownership automatically passes to the other parties should one person pass away; alternatively, you may be tenants in common, whereby each individual owns a share that does not get passed on to the other owners.
In a shared situation, choosing ownership as tenants in common is often best; however, if you have entered as joint tenants, it is possible to change the agreement., More information about the severance of joint tenancy is available from specialists such as https://www.parachutelaw.co.uk/severance-of-joint-tenancy.
Is buying a property with friends the right choice?
For people who are struggling to raise funds to get on the property ladder, buying a house with friends can be an excellent way to own a home; however, it is important to be aware of what is involved and to get the legalities arranged to meet the needs of all parties.
