Clubbing together to buy a home

With house prices so high, I can't afford to buy a property on my own so I am thinking of buying a house with a friend. What sort of legal issues should we consider before we go ahead?Firstly, you will need to do your sums to see how much deposit you can raise between the two of you and how much you can afford to borrow together.

With house prices so high, I can't afford to buy a property on my own so I am thinking of buying a house with a friend. What sort of legal issues should we consider before we go ahead?

Firstly, you will need to do your sums to see how much deposit you can raise between the two of you and how much you can afford to borrow together. Then you will need to speak to an independent financial adviser who will help you find a suitable mortgage. Once you have sorted out a budget, you can start house hunting.

What happens once we have found a house we can afford?

You will need to speak to your solicitor about the way in which you co-own the property. Both your names will be on the title deeds and mortgage. Assuming that you are each contributing to the deposit equally and you will share all outgoings equally (including the mortgage payments) then your solicitor can prepare a trust deed which will reflect this agreement. You should also both make wills

to provide for what will happen to your respective share in the house in the event of the death of either of you.

What if one of us wants to sell the house in a few years' time?

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Hopefully, whoever wishes to stay on in the house could buy the other one's share, once you have agreed on the market value of the house. The friend staying on in the house could take out a further advance from the existing mortgage company to raise the funds or remortgage simultaneously with the house being transferred from joint names to his or her sole name. Otherwise, the house would have to be sold and the costs and the net profit split equally.

Any other points we should bear in mind?

If your friend defaults on his or her share of the mortgage payments, do bear in mind that the mortgage company could pursue you for any shortfall, as you will be jointly liable and individually liable for the whole amount owed. So, choose your co-owner carefully!

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