In a housing market gone crazy, couples have an advantage. The pooling of resources with the person who knows you best (and loves you anyway) automatically boosts you a few rungs higher up the property ladder. It also means you have someone to share the legwork with—finding a place you like and can actually afford may be easier said than done. Nearly three quarters of first-time buyers are ’couple households’, in the conventional sense, and this is a figure that’s set to rise. It follows that savvy would-be homeowners and those looking to upsize their ‘starter homes’ are looking at their besties and asking: “Could we? Should we?”
Everybody’s at it
“Best friends buying property together is a growing trend,” says clinical psychologist Linda Blair, who specialises in stress management. “In a way, it’s the obvious response to ever-higher house prices. I love the idea, especially as it helps combat the other scourge of our times, which is loneliness. However, it’s important to do it in a way that protects all parties, financially and emotionally.
“When you buy with a romantic partner, you’re aligning your goals for the future and working towards a shared vision. It’s different with a friend, especially when you’re in your 20s and 30s, because things can turn on a dime. One of you might fall in love or get a promotion that changes the landscape considerably. Think through all the potential scenarios and decide together how they would play out. Record and formalise your agreement (have it signed by witnesses) so there are no grey areas. It may seem OTT now but could save a lot of heartache in the future.”
Protect your investment
From a financial and legal perspective, your number one consideration should be protecting the money you’ve invested in the property, which means getting a solicitor involved. They’ll draw up a contract that confirms the funds contributed by both parties and, just as importantly, how the funds will be split between you if and when you sell the house later. “People trust their friends implicitly,” says Holly Andrews, managing director of independent finance brokers KIS Finance. “But living together is very different from cocktails and movie nights once a week. It throws into stark relief differences you previously found charming or quirky, and the reality is that things may turn sour. So protect your hard-earned cash.”
Aside from money issues, make sure you will enjoy living with the friend. “I lived with someone I had been close to for years but often walked through the door to discover she hadn’t been treating the house the way I would have liked,” says Holly. “Agree some basic ground rules, such as how often it’s OK to have friends or partners over, where it’s acceptable to smoke (if applicable) and how you’ll split the cleaning. Tell your friend what is important to you and make sure they are happy to live that way, and likewise make sure you are happy with their needs.”
Separate ways
And when the arrangement draws towards its inevitable conclusion, and one of you wants to sell the house? “You can’t sell the property without agreement from both owners,” says Holly. “If one of you wants to stay, you could potentially remortgage to raise the funds needed to ‘buy out’ your friend if you can afford it, and then put the property in your sole name. Maybe a friend or partner could replace the friend wishing to leave, covering their half of the mortgage and living costs, or you could find a lodger. Otherwise, you’d need to keep the property or both be prepared to move out. Ensuring the legal and financial framework is in place can really help during what can be an emotional time.”
If you go into the arrangement with a mature attitude and level head, living with your best friend can be an enriching experience you’ll both remember fondly forever. “It can strengthen an already close relationship,” confirms psychologist Linda Blair. “And if, when you sell, you both make some money, so much the better.”
If home ownership is something that you’re thinking about but you’re struggling to get enough cash together for a deposit, then you need to know about Post Office Family Link™ mortgages, provided by Bank of Ireland UK. With a Post Office Family Link™mortgage, a close family member (usually a parent or step parent) could help you raise a 10% deposit by borrowing the money against their own home (as long as it is mortgage-free). Find out more here.