Should I Buy A House With My Friends?

Published: 26/02/2018

More friends are buying houses together than ever before.

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

The trend is particularly prominent in larger cities like London and Manchester where deposits and house prices are much higher.

Young people are keen to hop onto the property ladder sooner rather than later instead of waiting to settle down with a partner, the research suggests.

If you are considering purchasing a property with a friend, the process is the same. Mortgage lenders don’t look at a couple who are friends or partners differently. You have to pass all the ordinary affordability checks to get a mortgage, regardless.

Note that most lenders will let up to four people be registered as owners of a property.

If you purchase a property with a friend, you’ll probably be a “tenant in common”. This means you and your friends can own different shares of the property. You also won’t automatically inherit the property if the other person passes away. Normally, when a married couple buys a house, they are “joint tenants”, and the house would automatically pass to the other if one dies.

It’s also a good idea to get a “deed of trust”. This lays out all your responsibilities, as well as how much was contributed to the property by each party, should one of you want to sell before an agreed period.

There is no reason why friends can’t be great co-homeowners.

For more information about becoming a tenant in common with someone, read our article ‘If you own a property with someone else, you may need a declaration of Trust’

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