UK Mortgages(1) If your salary is not big enough to enable you to buy your first property alone, you could consider buying with a partner or friends. Many couples buy their first home together and the lender will take into account both incomes.
Traditionally, you can borrow two-and-a-half times joint incomes, or three times the biggest income plus one times the smaller income, though some lenders now offer more.
Most mortgage lenders will let you buy with up to three other people, but many will only take into account the two highest incomes, otherwise, four people might be able to borrow a huge amount. Lenders tend to use affordability rather than income multiples, which is a slightly more sophisticated way of calculating how much is lent - they take into account outgoings as well as income.
But before you dive into buying with friends, you need to be aware of the potential pitfalls:
The most important thing to remember is that you may be best friends at the moment but nobody can predict the future. One person may, and probably will, decide to go their own way at some point, perhaps because they want to set up home with a partner. Or one of the group could lose their job. It's essential that you know exactly what will happen when one person decides to leave.
Each borrower is responsible for the whole mortgage, not just their bit, so if three people bought together and one left, the other two would be responsible for the whole thing.
It is important to seek legal advice before buying together and get a document drawn up, usually a trust deed, covering all potential situations. And you need to decide whether to own the property as Joint Tenants or Tenants-in-Common (see box).
Joint Tenants The joint owners are regarded by the law as owning the whole of the property without any form of separate share or distinction between them. On the death of one of the Joint Tenants the whole of the property passes to the survivor or survivors. Normally the sole survivor of two Joint Tenants can sell the property and only needs a death certificate to prove their title or ownership. This is a very common and convenient form of ownership between husband and wife where the parties are content for the survivor to be the absolute owner. Where property is owned as Joint Tenants transfer of ownership on death is automatic. The ownership of the land held as Joint Tenants cannot be altered by a will. A will made by a Joint Tenant, which leaves the land to anyone other than another Joint Tenant would be ineffective.
Where co-owners are not married, or have made different contributions to the price, the preferred form of joint ownership will usually be as Tenants-in-Common.
Tenants-in-Common This means that the co-owners are regarded in law as having separate and distinct shares. They may give their shares away by will, they may even charge or mortgage them to a lender. On death of a Tenant-in-Common the share of the deceased co-owner is protected by the requirement that another trustee has to be appointed before the land or property can be sold. If the shares are complex a separate trust deed will usually be drawn up setting the shares out.
A service has recently been launched for first-time buyers who want to get onto the housing ladder by buying with others. offers a Joint Ownership Service that gives advice to groups buying together and helps individuals find potential property partners to invest with. It provides information and advice about joint ownership, such as legal and insurance requirements and if you're looking for someone to boost group numbers, or to find someone else with whom to buy, you can contact other people wanting to buy in the same town, you read profiles and choose who you want to get to know by email.
Buying together could provide a valuable stepping-stone on to the housing ladder if your salary won't stretch to buy your first home alone.
But make sure you fully understand what you are getting into, choose people you know well to buy with and always get a legal document drawn up setting out what will happen if someone wants to sell their share. But while money can't buy you love, if you come together with your eyes open, buying with a little help from your friends could turn out to be a great move.
Advantages of buying together:
Can afford to get onto the property ladder
Invest in your own property not a landlord's
Move out of home - freedom from parents
Share cost of deposit
Share mortgage costs
Share household bills
Can be cheaper than renting
Property ladder doesn't get further and further away
It may be the only option.
Disadvantages of buying together:
You have to share some of your living space
Need to draw up trust deed and co-habitation agreement
Need to make sure you don't fall out (or you will have to call on those agreements)
Might need to draw up a will, take out additional insurance (life, mortgage payment protection)
Initial legal costs.
Agree in writing what share of the property each of the buyers own.
Formally agree what will happen if somebody leaves the property or is unable to pay the mortgage.
Make plans for what will happen if one or more people want to sell the property.

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