Buying with a friend or partner: what you need to know
Buying a property with someone else is increasingly common. Rising house prices mean that a single income and a single deposit often go less far than they used to, and combining resources with a partner, friend, or sibling can make homeownership achievable when it would otherwise be out of reach.
It's also a decision that carries real complexity: legal, financial, and personal. The mechanics of joint ownership are straightforward enough when everything goes well. What requires careful thought is what happens if things change.
This article covers the key things you need to understand before buying with someone else.
How joint mortgages work
A joint mortgage is simply a mortgage taken out in the names of two or more people. Both applicants are assessed together: their combined income is used to calculate how much can be borrowed, and both credit histories are reviewed.
Up to four people can be named on a mortgage with most lenders, though two is by far the most common arrangement. Where more than two people are involved, the mortgage is typically calculated on the two highest incomes, with the additional names adding a degree of legal commitment rather than necessarily increasing the borrowing amount.
The key thing to understand about a joint mortgage is that all parties are jointly and severally liable for the debt. This means the lender can pursue any one of you for the full outstanding balance, not just your share. If one party stops making payments, the other is fully responsible for covering the shortfall. This is a significant commitment and should be entered into with clear eyes.
Tenants in common vs joint tenancy
When you buy a property jointly, you must decide how legal ownership is structured. There are two options: joint tenancy and tenants in common. The difference is substantial.
With joint tenancy, you both own the property equally and entirely. If one owner dies, their share automatically passes to the surviving owner (this is called the right of survivorship). You can't leave your share of the property to anyone else in a will; it passes automatically to your joint owner.
With tenants in common, you each own a defined share of the property. That share can be equal (50:50) or unequal (for example, 60:40 if one party contributed a larger deposit). When one owner dies, their share passes according to their will. It does not automatically transfer to the other owner. Tenants in common can also sell or transfer their share independently, subject to certain conditions.
For romantic partners who are married or in a civil partnership, joint tenancy is often the natural choice. For unmarried couples, friends, or siblings, particularly where one party is contributing more financially than the other, tenants in common with a declaration of trust is usually the more appropriate structure.
Declarations of trust and co-ownership agreements
If you're buying as tenants in common, particularly with unequal contributions, a declaration of trust (also called a deed of trust or co-ownership agreement) is essential.
This is a legal document that records the agreed ownership arrangement and sets out what happens in a range of scenarios: what share each person owns, what happens if one person wants to sell and the other doesn't, how ongoing costs are divided, and how the property will be valued and sold if the arrangement comes to an end.
Solicitors prepare declarations of trust as part of the conveyancing process. They typically cost between £200 and £500 and are one of the most important documents in a joint purchase. Agreeing the terms of your co-ownership arrangement when you're on good terms, before you move in, is infinitely easier than trying to resolve it once the relationship has broken down.
Without a declaration of trust, disputes about ownership shares or the right to occupy are resolved by general property law, which may not reflect what either party intended or what's fair given their respective contributions.
What if one person wants to sell and the other doesn't?
This is one of the most common points of difficulty in joint ownership arrangements, and it has no simple answer without a co-ownership agreement that addresses it explicitly.
In the absence of an agreement, if one co-owner wants to sell and the other refuses, the party wishing to sell can apply to a court for an Order for Sale. This is a formal legal process that forces the sale of the property, but it can be slow, expensive, and deeply unpleasant.
A well-drafted declaration of trust typically includes a dispute resolution mechanism, for example, a requirement to offer the other party the right to buy out your share before approaching the open market, or an agreed process for obtaining a valuation and proceeding to sale if no agreement can be reached privately.
What happens to the mortgage if you split up?
If you're buying with a partner and the relationship ends, the mortgage doesn't end with it. Both names remain on it, and both remain equally liable for the payments, until a formal agreement is reached about what to do with the property.
The most common outcomes are that one party buys out the other's share and takes on the mortgage in their sole name, or the property is sold and the proceeds are divided according to the ownership structure. Either way, this requires the consent of the lender and, where a buyout is involved, a formal remortgage application in the name of the party taking sole ownership.
This process is called a transfer of equity. It involves legal work, a mortgage reassessment, and potentially stamp duty in certain circumstances. Your solicitor and mortgage adviser can guide you through it, but it's not instant or cost-free.
Understanding this in advance doesn't mean expecting the relationship to fail. It means making decisions with full information rather than discovering the consequences later.
Buying with a friend
Joint ownership between friends raises slightly different considerations to a couple, primarily because the arrangement is less likely to be long term. Friends may want to sell after a few years, may meet partners and want to change their living situation, or may have differing views on maintenance, improvement, and the use of the property.
All of these situations are manageable, but they're far easier to manage if they're addressed in a co-ownership agreement before you buy.
Specific things to address when buying with a friend include: what happens if one person wants to leave sooner than the other, who is responsible for day-to-day decisions about maintenance and repairs, how disagreements about the property are resolved, and what process you'll follow to exit the arrangement when the time comes.
Buying with a friend can work very well. Many people have done it successfully, and both parties have ended up better off than if they'd rented for the same period. What makes it work is clarity upfront, not optimism that everything will just sort itself out.
The impact on future borrowing
A joint mortgage appears on both parties' credit files. This has implications beyond the immediate purchase.
If you later want to borrow money separately, for a car, a personal loan, or eventually another property, the joint mortgage will be considered as a financial commitment in any affordability assessment. If you separate from your co-owner but remain on the mortgage, lenders will continue to count the mortgage as your liability even if you've moved out and are no longer paying it.
The only way to remove yourself from the mortgage, and from the associated financial liability, is to be formally released from it by the lender. This requires either a buyout (where one party takes on the mortgage alone) or a sale of the property.
If you're buying with a friend or a non-permanent partner, it's worth thinking through the exit route from the start rather than treating it as a bridge to cross when you get there.
The short version: buying jointly significantly increases borrowing capacity and makes homeownership accessible for many buyers who would struggle alone. It's a practical and often sensible route, but it requires careful thought about the legal structure, a clear co-ownership agreement, and honest conversation about what happens if circumstances change.
For couples buying together, particularly those who are married or planning to be, the process is relatively straightforward. For friends and unmarried partners, particularly where contributions are unequal, a tenants in common arrangement with a well-drafted declaration of trust is essential.
A mortgage adviser can help you understand how joint ownership affects your borrowing capacity and your options. Your solicitor will handle the legal structure. Between them, you'll have the right advice to make the arrangement work for you both.
This article is for informational purposes only and does not constitute financial advice. Always speak to a qualified mortgage adviser before making decisions about borrowing.