Buying a home jointly: What first-time homebuyers need to know

For many first-time buyers, buying a home alone can feel impossible. With house prices rising, the challenge of affordability is really difficult for some. A recent survey of 2,000 adults aged 18 to 45 who do not own a home found that 40% believe they will never be able to buy a property on their own.

This is why buying a home jointly, whether with a partner, friend, sibling, or parent is becoming an increasingly popular route onto the property ladder.

But before pursuing this option, it’s essential to understand the legal and financial implications of joint homeownership. How you structure your home ownership, what happens if someone wants to sell, and how to protect your financial interests are key considerations.

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In this blog, we’ll cover:

1. ️The benefits of joint homeownership

2. ️ Joint tenants vs. tenants in common – what’s the difference?

3. ️ Buying with a spouse or partner

4. ️ Buying with a friend or sibling

5. ️ Buying with parents – joint borrower sole proprietor mortgages

6. ️ The importance of legal agreements

If you’re considering buying a home with someone else, here are some key things you need to know.

1. Why buy a home jointly? The benefits

Pooling resources with someone else can make homeownership more affordable. Here’s how:

• Bigger deposit – You can combine savings to put down a larger deposit, unlocking better mortgage deals.

• Higher mortgage affordability – Lenders assess both incomes, meaning you could borrow more than you could alone.

• Shared buying costs – Stamp duty, solicitor fees, and moving costs can all be split.

• Lower monthly expenses – Mortgage repayments, utility bills, and maintenance costs can be divided between co-owners.

• Higher mortgage affordability – Lenders assess both incomes, meaning you could borrow more than you could alone.

• Shared buying costs – Stamp duty, solicitor fees, and moving costs can all be split.

• Lower monthly expenses – Mortgage repayments, utility bills, and maintenance costs can be divided between co-owners.

However, while joint buying offers financial advantages, it’s essential to structure ownership properly to avoid complications later.

2. Joint Tenants vs. Tenants in Common – What’s the difference?

When two or more people buy a property together, they must decide whether to be joint tenants or tenants in common.

Joint Tenants

• Equal ownership – Each owner has a 50% share, regardless of who contributed more to the deposit.

• Automatic inheritance – If one owner passes away, their share automatically transfers to the other owner (this cannot be changed in a will).

• Common among married couples – This setup is popular with spouses who intend to share the home equally.

Tenants in Common

• Defined shares – Each person owns a specific percentage of the property, which can reflect their financial contribution.

• Pass on your share – Each owner can leave their share to someone else in their will.

• Popular for unmarried partners, friends, and siblings – This allows flexibility in ownership.

If you’re buying with a friend or relative, a tenants in common arrangement allows each person to protect their financial contribution.

3. Buying with a spouse or partner

If you’re married, the most common setup is joint tenants, where both partners co-own the home equally.

• ️Both names are on the mortgage and title deeds

• ️If sold, the proceeds are shared equally

• ️If one partner passes away, the other inherits their share automatically

However, divorce or separation can complicate things. While the starting point in divorce cases is often a 50/50 split, courts may adjust based on:

• ️ Financial contributions

• ️ Future earnings

• ️ Children’s living arrangements

Unmarried couples can choose either structure, but many opt for tenants in common to reflect different financial contributions.

If you’re unmarried, consider drawing up a deed of trust to outline how the property is owned and what happens if you split.

4. Buying with a friend or sibling

As house prices rise, friends and siblings are increasingly buying homes together. However, there are key things to consider:

• ️ Most co-buyers opt for tenants in common – This allows each person to own a defined share.

• ️ Joint mortgage responsibility – You are both equally liable for repayments, even if one person stops contributing.

• ️ Credit impact – A joint mortgage links your credit files, meaning your financial actions can affect each other’s credit score.

Legal Protection:

• ️ Get a deed of trust – Outlines ownership shares and what happens if one person wants to sell.

• ️ Discuss long-term plans – Will one person want to move out? How will you handle a partner moving in?

• ️ Agree on costs upfront – Maintenance, repairs, and unexpected expenses should be shared fairly.

• A cohabitation agreement can clarify how household bills, mortgage repayments, and future sales will be handled.

5. Buying with parents – How it works

Many first-time homebuyers struggle to meet affordability criteria, so parents often step in to help.

One option is a Joint Borrower Sole Proprietor (JBSP) Mortgage:

• ️ Parents are on the mortgage but not the title deeds – They share responsibility for repayments but don’t own the home.

• ️ Helps increase affordability – Their income is considered in the mortgage application.

• ️ Avoids second-home stamp duty – Since parents are not listed on the property title.

{Popular JBSP lenders include: Barclays, Metro Bank, Skipton, and Gen H}

Gifted Deposits

• Another common method of parental support is a gifted deposit, where parents provide money towards the deposit. This is not a loan, and lenders typically require a gift letter confirming the funds are non-repayable.

• If a parent expects repayment, ensure the agreement is clearly documented to avoid disputes.

6. The importance of legal agreements

Buying a home jointly is a big financial commitment, so it’s crucial to set expectations from the start.

• ️ Deed of Trust – Outlines ownership shares, what happens if one party wants to sell, and how proceeds will be split.

• ️ Cohabitation Agreement – Covers property maintenance, financial contributions, and future changes.

• ️ Will & Life Insurance – Protects each co-owner in case of illness or death.

Having a clear legal agreement prevents potential disputes and protects everyone’s investment.

Is buying jointly right for you?

Buying a home with someone else makes homeownership more affordable, but it also comes with legal and financial responsibilities.

Before committing, make sure you:

• ️ Understand the ownership structure – Joint tenants or tenants in common?

• ️ Have legal agreements in place – A deed of trust can protect your interests.

• ️ Discuss long-term plans – What happens if someone wants to move out or sell?

Need advice? Let’s chat!

If you’re considering buying a home with someone else, we can help you explore your options and connect you with trusted mortgage brokers and legal experts.

Book a free 30 minute consultation.

Buying together can be a great decision - with the right planning and protections in place!

Disclaimer:

This information is for general guidance only and does not constitute professional advice. The content is based on the author's research and opinions at the time of writing. Please consult with a qualified professionals before making any investment, financial, or business decisions.