First Time Buyer Mortgages

First Time Buyers – Sharing a Property

In areas where property prices (and rents) are particularly high, an increasing number of people are joining forces with friends to purchase property instead of sharing the traditional rented house or flat.

This approach offers sharers the opportunity to get on to the property ladder, together, earlier than they would be able to individually and hence to share the benefits of any subsequent rise in property prices.

Sharing a Property – Mortgage Options
Many (but not all) financial institutions will offer mortgages for up to four people. However, they may not necessarily take all four incomes fully into account when calculating the size of the available loan. Consulting a mortgage broker might help you to identify the most suitable mortgage products for a shared purchase.

Sharing a Property – Potential Pitfalls
In order to make a success of a shared property purchase, a number of factors need to be considered:

Most sharers will want to move on to another property, within a few years, and often at different times, so it is important that details of each person’s share and deposit paid are documented, preferably by a solicitor, so that there are no disputes about who owns what. Similarly, mortgage payment obligations should also be agreed and documented.

Several unrelated people living within a house will require a different distribution of space (personal space in particular) compared with a couple, if they are to coexist harmoniously. A Victorian or Edwardian house with several reception rooms, a basement and more than one bathroom is likely to be more appropriate than a modern, open plan property.

Buying an easy to maintain property in good condition is recommended because friction will be reduced between sharers over potential extra costs for repairs and who is responsible for doing what maintenance. A well maintained property will also be easier to resell when the time comes.

For a successful shared property purchase, stick to the mainstream and leave the more eccentric types of property to individuals and couples!