Things to consider before buying a home with a friend
Should you buy a home with a friend?
In theory, buying a home with a friend could be the best idea you’ve ever had. You get on great, you can pool your finances to buy a bigger place, and it means you both get to step onto the property ladder.
But buying a home is a financial risk and a long-term investment, so if you’re thinking about teaming up with someone to achieve your homeownership dreams, you’ll want to be sure they’re the right person to do it with.
Before taking the plunge, it’s crucial to understand what buying a home with a friend actually entails – both now and in the future. Here are some things you should consider before embarking on your home-buying journey together.
Things to consider before buying a home together
Shared responsibilities
Mortgage repayments, bills, repairs and home maintenance – all will be your shared responsibilities as joint homeowners. Whether you split everything equally or decide on another way to share the costs, agreeing up front who takes care of what can prevent disagreements further down the line.
Open communication is key
Consider how well you and your friend communicate with each other, as you’ll want to have open and honest discussions with your co-homeowner without it causing awkwardness or straining your friendship.
If you’ve never lived together before, you might want to trial the dynamic by renting together first. In which case, rental schemes like Intermediate Rent, London Living Rent or Rent to Buy could be the ideal stepping stone onto the property ladder for the two of you.
Companionship and community
One of the biggest benefits of buying a home with a friend is the companionship it brings. After all, you’ll be living with one of your favourite people in the world.
Many of us want to live somewhere with a sense of community, and buying with a friend gives you that, as you’ll have a core member of your inner circle under the same roof.
Financial transparency and association
Money can put pressure on friendships. So, if you haven’t already had an honest conversation with your friend about each other’s financial situation – both past and current – then make sure to do so before moving forward with the home-buying process. Both of you should know about any unpaid debts or mismanaged loans, so you can each make an informed decision.
Buying a home together also means you’ll become financially associated, which can impact both of your credit files. The same goes if you open a joint bank account to manage bills and mortgage repayments. This financial association means their credit history may be taken into account by lenders when you apply for credit in the future, and vice versa.
Agree on the legal stuff beforehand
Sometimes, despite the best intentions, things don’t turn out the way we hoped they would. Likewise, unforeseen circumstances can cause sudden and drastic change.
That’s why it’s good to protect everyone’s best interests by preparing legally for any eventuality. A cohabitation agreement clarifies expectations and puts your responsibilities in writing, making it easier to resolve any disputes that may come up. It’s best to seek independent legal advice to get one drawn up properly.
Conflict resolution
Even the best of friends disagree sometimes, and that’s okay. But when you live with someone else, even the smallest disagreement, like whose turn it is to take the bins out, can spiral into something bigger.
Having a plan of action for resolving disputes, whether it’s simply having a calm conversation, referring to your cohabitation agreement, or seeking support from a neutral third party, will give you some peace of mind.
And remember – just because you may disagree with your friend sometimes, it doesn’t mean you shouldn’t buy a home together. Discussing issues and finding a compromise are part of adulthood and sharing an investment.
Selling in the future
It might seem counterintuitive when you’re still thinking about buying a home together, but it could be a wise move to agree beforehand on what will happen when it comes to selling. Create a plan of action if only one of you wants to sell – would you buy the other person out or put the property up for sale?
Having an exit strategy in place can minimise any disputes if or when the time comes to move on separately from one another.
Finding a path forward together with Share to Buy
Buying a home with a friend can be a smart and empowering move for both of you. But it’s important to approach the process thoughtfully, considering all eventualities to keep your friendship going strong. Maintain open and honest communication throughout the process and seek professional advice where it’s logical to do so; this will help you navigate the path forward together with ease and confidence.
For more tips and advice on buying a home with a friend, read our list of questions to ask before starting your homeownership journey as a duo. Or use our property portal to start your home search.
