Buying a property with a partner or friends
Buying a property with another person can be an attractive option, as it means you can pool your savings towards a deposit, borrow a bigger mortgage, and share the burden of monthly repayments and any service charges.
Although it's most common for people to buy with one other person, 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 friends or family members who you trust enough to make a major investment with, buying a property under joint ownership might be a good option.
Which? Mortgage Advisers can explain how much you can borrow and help you apply for the best joint mortgage.
Video: tenants in common vs joint tenancy
When you buy a property with another person or people, you'll either buy as 'tenants in common' or 'joint tenants'. Watch our short video to find out about the key differences between the two options.
What is 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.
What is tenancy 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.
Should I buy as a tenant in common or a joint tenant?
Both types of joint ownership have pros and cons, depending on your personal circumstances and your relationship with your fellow buyers.
The table below shows some of the basic differences between the two forms of ownership.
- Find out more: the Which? Mortgage Advisers guide to joint mortgages
If you're buying a property jointly with another person (or people), you'll normally need to take out a joint mortgage together.
Joint mortgages are usually shared by two people, but some lenders will allow up to four people to take out a joint mortgage together.
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.
If you decide that you want to look into getting a joint mortgage, it's worth getting some professional advice beforehand. The friendly team at Which? Mortgage Advisers can help you work out whether it's the right option for you and, if it is, they can also help you find the best deal based on your personal situation.
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.
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.