We’ve all been that kid in the playground who hopes to marry our best friend, who we promise to stay with forever and forever, and then we grow up. We realise that being so close to some people isn’t always what we crave, you learn some people in small doses are actually a blessing. But there are those few that you are akin with, that pass no judgement, who are always there and who being around is like a breath of fresh air.
At least we hope. In today’s market many graduates are realising the only option they have in order to avoid once again bleating to the orders of the parental nest, is to take a p[lunge and consider the path of co-habitation. University is an excellent primer for such situations. In today’s market buying a home with a friend maybe the only practical route to owning a house.
The notion seems simple enough, you trust this person and you never disagree, in actual fact it appears perfect. But do not be hasty, make sure you have thought this through rationally and that have dotted all the I’s and crossed all the T’s, BBC Business offers some useful tips if considering joint ownership of a property.
First decide what you want as there are many different roots to take with co-habitation, do you each want to pay for own property or rent. Each have their pros and cons it is important to weigh up as a group what you are each looking for and make the decision that best meets everyone’s interests.
Next is bills; one of the main benefits to living with a multitude of people is the slash in expenses, but you must know and understand what these payments are. Each tenant will be responsible for covering the cost of deposits; transaction costs e.g. legal fees, mortgage payments (which will need to be arranged on a suitable payment plan), maintenance costs, as well as the household bills.
Each one will be due at differing times so it is imperative that you know what is due, when and that you have arranged exactly how you will split the costs. In a house of many singular entities it is important to have a routine structure of making payments and electing somebody to oversee that it goes smoothly. It takes just one person being unable to pay to mess up the system for everyone. Setting up a joint bank account is a good way to keep track of expenses.
Another useful tip is to outline a possible plan if a situation arises in the future where you will choose to go your separate ways, this allows you to be covered for all eventualities and work out an objective plan that works for all effected parties.
This is a useful page highlighting the most commonly asked question of people considering co-habitation, and their answer provide essential tips that you will need to think about.
So key points:
Brush up on your laws, use this to guide you through the practical decision you need to make, and consider hiring professional aid if you are struggling so you avoid landing yourself in hot water or being taken advantage of. And most importantly of all, choose wisely the people you will be living with, this is a risky decision and you need to have people around you that you can trust, communicate well with and who will abide by the terms you all decide upon if you do choose to follow this endeavour.
Make sure you have read up on the laws and the key information you will need to know
How many people can jointly own a property and what rights do they have?
Up to four people can jointly be registered as legal co-owners of a property
Joint owners have a legal right to stay in their home unless a court order rules otherwise
If one of the owners wants to sell the property or take a loan out against its value, all of the owners have to give their consent, unless a court order rules otherwise
What are the different options for joint ownership?
There are joint tenancies, which are favoured by married couples and people in civil partnerships. And there is tenancy in common, which is favoured by groups of friends or relatives who are buying together.
What does joint tenancy mean?
If one of the joint tenants dies the property immediately passes to the other owner. This means individual owners can’t pass what they consider ‘their share’ of the property to a beneficiary in their will. Unless the co-owners are married or in a civil partnership, inheritance tax may still be payable.
Joint tenants must act as one in the eyes of the law. So, individual tenants would not have the option of only mortgaging their share of the property, for example. All of the tenants would have to take out a joint mortgage
by Lauren Knight
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