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What you need to know when buying a house with a friend

Buying with a friend could be a great way for you to get on the property ladder quicker than if you were buying by yourself, plus, you won’t have to take the financial hit quite as hard when there’s someone to share the cost with. However, there can be some disadvantages to buying a house with a friend if both parties aren’t clear on their intentions from the beginning.

To help set you on the right track, we’ve drawn up a list of the things to consider so that if you do decide to buy a house with a friend, then you’re going into it with your eyes wide open.

Multiple credit ratings

When applying for a joint mortgage, both parties credit scores will be taken into account, for the simple reason that with a shared mortgage, you’re both responsible for paying it off. Therefore, the lender needs to know that you’re trustworthy and can afford it without the risk of any default of payments.

A poor credit score will affect the mortgage application and one low credit score could drag the rest down, meaning that you could miss out on some of the better mortgage terms on offer. It’s a good idea to find out how you could improve your credit score, before you start applying for a mortgage.

Be open and honest

It’s imperative that you’re upfront with each other from the get go. This means having an open and honest conversation, even if you do find it a bit awkward. Make sure you ask questions such as:

  • How are you planning to fund it?
  • How much deposit money do you have?
  • How long do you plan on living there for?
  • Are the monthly payments going to be split 50/50?

Be careful deciding on the monthly payments, particularly if you’re putting down different deposit amounts. For instance, if you paid £10,000 deposit and your friend paid £5,000 deposit, yet you both pay equal amount of the monthly repayments, then you might want to consider registering your unequal shares in the property with the Land Registry.

Cohabitation agreement

Once you’re both happy and feel comfortable with your plan, it’s advisable to write up a cohabitation agreement that you will both sign and agree to. This is a legal document that outlines the points you’ve agreed to, such as what will happen iF one person wants to move out and sell their share of the property. A solicitor can help draw this up for you, if you feel it is necessary.


So now you know the things to bear in mind, you can go ahead and start the fun bit, the property search!

Because we play by the book we want to tell you that…

Your home may be repossessed if you do not keep up repayments on your mortgage.
There may be a fee for mortgage advice. The actual amount you pay will depend upon your circumstances.
The fee is up to 1% but a typical fee is 0.3% of the amount borrowed.

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