IS A GROUP MORTGAGE THE BEST OPTION?

SOME THOUGHTS ON THE MATTER…

It’s perhaps inevitable that, at a time when buying property is becoming more of a challenge, new ways of acquiring a home begin to emerge.

With first-time buyers having to raise as much as £30k just for a deposit on an average home, many on a so-so salary face the prospect of having to save for years before they get that first foot on the property ladder and, unsurprisingly, the prospect of doing without life’s little luxuries for the best part of a decade is pretty depressing.

Help to Buy and Rent To Buy are giving some a leg up but the Bank of Mum and Dad is now a more significant player than many of the high street lenders.

However, according to some recent research (https://www.propertywire.com/news/uk/young-people-uk-get-mortgage-friend-research-finds/) most millennials are now open to the idea of teaming up with friends to buy a home together.

Leaving home

At first sight it may seem like a logical step; after all, when leaving the parents and stepping out on their own, plenty of friends rent their first home together already.

However, it’s also true that many of those renting “partnerships” end up in acrimony as young people not used to some of the discipline required when living away from home for the first time fall out with each other over personal habits or responsibilities.

It can be hard enough to extricate yourself from a rental contract but image how much more fraught with difficulty it could be when there’s something like a mortgage involved.

We’re not saying shared ownership should be dismissed as an option. There are bound to be some examples out there already of deals and agreements which have ended up being profitable and given each party an opportunity to move on up the property ladder when the time was right.

What if …

But, if you’re considering it, our advice would be to make sure there are clearly understood agreements in place from the outset. What happens if one partner wants to sell, for example? What about if one partner’s financial circumstances change and they struggle to contribute their share of the mortgage payments? How is the responsibility for the upkeep of the property shared?

These are just a few of the things which need to be considered but each one has the potential to stymie a deal or spoil a harmonious arrangement so we’d urge anyone thinking about buying a home with friends to consider a contract which all must sign.

If you’ve done that already and you’re keen to proceed, feel free to give us a call. We have a range of reasonably-priced homes on our books around the UK and would be happy to help if we can with advice on what to look for; just give us a call or drop us a line.

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