Buying a house Tenants in common vs joint tenancy
Buying a home with a friend or partner? There are two types of joint ownership: joint tenancy and tenancy in common. Here, we explain the differences between the two.
Up to four people can jointly own a property. Jointly owning a property means that you can't be forced to leave without a court order; the property can't be sold without your agreement or a court order; and additional loans can't be taken out on the property without your agreement.
If you're planning to buy a house with a partner, friends or relatives it's important to decide what type of legal ownership structure is best for you.
- Being tenants in common or joint tenants could have implications for your mortgage application. For impartial, expert advice, call Which? Mortgage Advisers on 0808 252 7987
As joint tenants, you all own the property together. In the eyes of the law, you must act as a single owner. That means you'll need to remortgage the value of the whole property at the same time. 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.
Joint tenancy is typically used by married couples or people in civil partnerships.
Tenants in common
Less than half of the 1,990 home-movers we asked in the 2015 Which? national property survey felt they understood the meaning of 'tenants in common', and it's hardly surprising given the old-fashioned jargon used to describe it.
As tenants in common you all own a defined share of the property, but they don’t have to be equal shares.
You can separately sell your share of the property. If you die, your share passes to a beneficiary named in your will or a next of kin. This type of joint ownership is typically used by friends or relatives who are buying together.
Ending joint ownership
As joint property owners, you will 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 or you get a job somewhere else and want 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.
Most mortgage lenders will typically only let two people have a joint mortgage. If more than two of you would like to buy a house, you may have to shop around to find the right lender. If you decide to get a joint mortgage you are both liable for the whole amount. So, if one person leaves or stops paying the other will have to cover their share of the repayments.
Which? Mortgage Advisers can help you find the best lender for your personal circumstances. You can arrange a free initial consultation with one of our experts by calling 0808 252 7987.
Your home may be repossessed if you do not keep up repayments on your mortgage.
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