Cant't get on the property ladder? Then think about buying with a friend instead (2022)

THEY say a man's home is his castle but what do you do when you can't afford the bricks let alone the fixtures and fittings?

Many young Brits are finding it increasingly difficult to get their foot on the property ladder.


A shock report last week from the Institute of Fiscal Studies revealed there has been a huge collapse in home ownership for those on middle incomes in the last 20 years thanks so soaring prices and stagnant wages.

Just over a quarter (27 per cent) of those aged between 25 and 34 earning between £22,200 and £30,000 own their own place, compared to 65 per cent in 1996.

But despite the difficulties, many Brits are still desperate to have a place they can call their own - and are joining forces so they can finally take that first step.

New research from HSBC found that the vast majority of 18-40 year olds - 80 per cent - will now consider buying with a friend or someone who isn't their partner.


And mates Matthew Vincent, 26, and Daniel Clarke, 25, have just exchanged on a two-bed flat at a new Barratt development in Hendon, north West London.

The pair have spent the last few years living with their parents and saving as much as they can for a deposit for their own place - but still wouldn't have been close to affording a flat - so they've decided to buy together instead.

And as is the case with all good ideas - they decided to to take the step together over a pint.

Account manager, Matthew, said: "We were just chatting in the pub one day and said 'shall we just do it together?' and it went from there.


"We've been mates for a while now and are both in the same situation, living at home and saving for a deposit."

Both lads put down £25,000 each deposit - 10 per cent of the flat value of just over £500,000 - but to help them even more they used the Government's Help To Buy loan scheme too.

Under the scheme, they've borrowed 40 per cent of its value - £200,000.

The loan is interest free for five years - and the boys will have to pay it back after that time or when they sell it - but it's helped them get on the ladder and reduce their mortgage payments too.

Buying with mates: what you need to know

BUYING your first property is a huge step. But what about if you're going in with mate? Here's what you need to know.

The process is the same - Lenders don't look at a couple who are partners or who are friends any differently - you'll still have to pass all the affordability checks to get a mortgage. Most lenders will let four people be registered as a owner of a property.

Be a "tenant in common" - This means you and your friend can own a different share of the property, and won't automatically inherit the property if the other person dies.

Think about a "deed of trust" - You might think that you're both happy with what you're agreeing to - but circumstances change. A deed of trust lays out all your responsibilities, as well as how much you contributed to the property, and what will happen if either party wants to sell up before an agreed period.

Their mortgage is from Santander - a two year fixed deal at 1.44 per cent.

Overall their mortgage payments will be £772 a month - or £386 each - and they will be moving into their new home when it is completed in June.

Mortgage expert David Hollingworth of London and Country Mortgages told The Sun Online that friends clubbing together for a home had been part of the mortgage market for a while.

And although the process of buying a house with friends is virtually the same as it would be for a married couple, there are a number of things that need to be considered.


"Pooling resources can clearly be helpful from the point of deposit but also for the amount that they can borrow," he said.

"It's just important to consider the practical side of things too and legal advice will be helpful and allow for some of these eventualities to be thought of now rather than dealt with in the future."

Normally, when a married couple buy a property they buy as "joint tenants" - this means that if one of them was to die, the house would automatically pass to the other owner of the house.

But it's recommended that if friends are entering an agreement to buy a home together they buy as "tenants in common" instead, which means that the share of the house can pass to their next of kin if either was to die.

How to get help buying a house

THERE are several government schemes available to help you get on the housing ladder.

  • Help to Buy loan: This scheme is for those who have a 5 per cent deposit, and is only available on new-build properties that are worth less than £600,000. The government lends you up to 20 per cent of the property value (interest-free for the first five years) which gives you access to cheaper mortgages.You will need to pay this back at the end of the mortgage or when you sell.
  • Starter Homes: First-time buyers under the age of 40 can access this new scheme. You’ll geta 20per cent discount on the market value of the property (new-build only) but you cannot sell or let the property for five years after you buy it.
  • Shared ownership: This scheme is available to non-homeowners who earn £80,000 a year or less (£90,000 in London). People can buy a share of a home from a housing association and continue to rent the remainder. Buyers will need a ten per cent depositas well as money to cover stamp duty and other fees.You’ll also need to find a mortgage lender that is willing to lend on shared ownership properties

Another thing which is strongly recommended friends do is organise something called a "deeds of trust."

This is a legal agreement which set out formally what the responsibilities and expectations are on both parties - for example what would happen if someone wanted to move their partner in, or wanted to sell up earlier than planned.

The lads haven't done this, with Matt saying they have both agreed everything verbally.

They only took a two-year deal to give them flexibility in case their circumstances change - and both plan to stay a maximum of four years before reassessing.

"We both trust each and everything has gone down the middle," Matt said.

"There's no way we would have been able to do it otherwise, without Help to Buy or each other, and would still be living at home for the foreseeable future.

"I think more and more people will start doing this too, it's been an easy process so far.

"We both see it a short-term thing really, we've got a two-year mortgage and we'll see what happens then.

"It's been a massive help doing it together."

Budget Day 2017: ​Chancellor​ ​of the Exchequer​ ​Philip Hammond announces that he will abolish stamp duty for all first time home buyers up to £300,000

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