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Buying a home

Tenants in common vs joint tenancy

By Joe Elvin

Article 11 of 13

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Tenants in common vs joint tenancy

Buying a property with a partner or friend? Find out the differences between the two types of joint ownership - joint tenancy and tenancy in common.

If you're keen to get on the property ladder, buying with another person can be an attractive option, allowing you to bulk up your deposit and share your repayments. 

Although it's most common for people to buy a property on their own or with a partner, it's actually possible for up to four people to share ownership of a property - even if they're not related. So if you have several friends or family members who you trust to share a major investment, you could buy a property under joint ownership.

  • Thinking of buying with friends or family? To get impartial expert advice on the right mortgage for you, call Which? Mortgage Advisers on 0808 252 7987 

What are my rights under joint ownership?

As joint owners, each person is the legal owner of the property. Your rights as a joint homeowner include:

  • You can't be forced to leave without a court order
  •  The property can't be sold without your agreement or a court order 
  • Additional loans can't be taken out on the property without your agreement.

When you buy a property, you will need to register all the owners with HM Land Registry. But there are two types of joint ownership you can register: 'tenants in common' and 'joint tenancy'. Each works quite differently, so it's important to decide what type of legal ownership structure is best for you and your co-owners.

Joint tenancy

As joint tenants, each person owns the whole of the property - or put another way, each person has a 100% stake in the property's value. In the eyes of the law, you must act as a single owner. That means you'll need to get one joint mortgage to cover the value of the whole property. 

If one of you dies, your part of the property automatically passes to the other owners. You can't leave part of the property to someone else in a will.

You must all agree if you want to sell the property.

Married couples that own property together would typically be joint tenants.

Tenants in common

As tenants in common, you can all own a separate share of the property, and these shares don’t have to be equally sized - so for example, you may own 50% of a property, while each of your two children owns 25%.

Each owner can also leave their share of the property to whoever they choose in a will when they die.

In theory, each owner can mortgage their part of the property separately. But in reality, few - if any - mortgage lender would be willing to agree to this. So you will still normally need to take out a joint mortgage.

As with joint tenancy, you must all agree if you want to sell the property.

This type of joint ownership is typically used by friends or relatives who are buying together.

 

Ending joint ownership

As joint property owners, you all have equal rights to live in the property - so if one person wants to sell, everyone else needs to agree. This can cause problems if, for example, you're splitting up with a partner but one of you wants to keep living in the property or one owner gets a new job and wants to relocate.

If you want to sell and the other owners don't, you may have to seek a court order. Going to court will be stressful and expensive so it's better to avoid doing this if you can.

You may want to draw up a legal agreement before moving in together that defines under what circumstances the property will be sold, how much notice is required and what proportion of the sale price each person is entitled to. All parties should take independent legal advice to make sure the agreement is written correctly and fairly represents their interests.

If you want to change from tenants in common to joint tenants - or vice versa - you can register this change with HM Land Registry free of charge with the agreement of your co-owners. 

Joint mortgages

If you are buying a property jointly with one or more other people, you will normally need to take out a joint mortgage together.

It is most common for joint mortgages to be shared by two people, but some lenders will allow them for up to four people. 

However, if there are more than two people on a mortgage, lenders will normally only take the income of the two highest earning people into account.

Remember, if you get a joint mortgage you are all equally responsible for making the repayments. So, if someone leaves or stops paying you will have to cover their payments.

Should I buy as a tenant in common or a joint tenancy?

Both types of joint ownership have pros and cons, depending on your personal circumstances and your relationship with your fellow buyers. To find out which type of ownership is right for you, visit our guide to joint mortgages on Which? Mortgage Advisers. 
 

  • Last updated: July 2017
  • Updated by: Marie Kemplay
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