Estate agents encourage buyers to consider pooling their finances to step on the property ladder in Chiswick, Bedford Park, Acton, Hammersmith and Wendell Park.
The economic downturn has prevented many would-be homeowners from raising the large deposits required from reluctant banks. The National Association of Estate Agents (NAEA) believes buying with family or friends could help to spread the costs of buying and maintaining a home.
The NAEA’s latest housing market for October has revealed a drop in the number of first time buyers. In October, this important section of the market made up only 20 per cent of overall sales compared with 23 per cent in September, a dip of three per cent.
A business arrangement
In the right circumstances joint ownership offers a way of avoiding the high costs associated with buying a property. By splitting the deposit, maintenance fees and mortgage repayments, this could make owning a home a more realistic aim for many would-be first time buyers.
It can be a win-win solution to get on the housing ladder with friends or family says Christian Harper of Chiswick estate agent OliverFinn: "Last year we had a client who did exactly this. She was renting through
OliverFinn and wanted to buy. The landlord wanted to sell so I suggested the price. She couldn’t afford to buy the flat on her own so asked a friend to buy 50%/50%.
"Our mortgage broker found a great deal for them as they were both reasonably high earning professionals but lacked a large deposit. We have just been instructed to let the flat for them now as they have both decided to take a year out together and go travelling and want to find a 12-month tenant. They are absolutely delighted that they bought together."
Top tips from
NAEA for anyone considering a joint ownership:
Consider your mortgage options – There are
mortgages that exist specifically for this type of purchase, so shop around. A combined income gives you greater choice of properties
Think about the worst-case scenario – One of the benefits of buying with friends or family should be a high level of trust, but that shouldn’t be to the detriment of legalities. Consult lawyers about a legally binding co-ownership contract and agree in advance what will happen if one owner’s circumstances change
Don’t forget who owns the TV – Create a comprehensive inventory of non-shared items or other costs. Keep a note of who pays for things like paint at the start of the shared ownership. This reduces confusion in the future and helps if one party wants to move out
Keep paperwork in order – This is a business transaction, and any paperwork relating to the property or mortgage must be in the names of the co-buyers. Ensure copies are made of all documents associated with the purchase to allow them to be readily accessible to both parties
Set a realistic timeframe – If you are buying with a friend it is likely that the relationship is, ultimately, temporary. For this reason, co-ownership should always be treated as an investment decision and buying a house with a good potential resale value makes sound business sense.
With a house likely to be the biggest purchase of a lifetime, there is a real need to view it as a business arrangement to avoid problems after moving in.
