With the property prices so high, it's becoming more popular to join forces to buy property. I don't mean boyfriend / girlfriend or married couples. The gay community are leading the way when it comes to buying property between friends and even family. In some areas, forming an alliance is the only way people can get on the property ladder.

Financial

By joining forces, lenders will consider you as a couple, therefore offering a higher amount of mortgage. Lenders will normally lend up to 2.75 times joint income - giving more buying power to future homeowners and allowing them to own a larger property. It is not impossible for up to 4 people to buy a property together, but remember, the more cooks, the bigger the chances of falling out.

Buying together can also make the costs easier to manage, with solicitors and mortgage costs - split. If your buying with a friend or relative, it's important to build flexibility into your plans, in case the man or woman of your dreams walks through the door. Sharing with a relative or a long term friend, can also take away the anxiety of getting a lodger for the spare room. 

It's also a good idea to set up a joint account, with direct debits for mortgage, insurances and bills. You then make one payment a month from your current account by standing order. This way, things are kept simple and up to date!

Strategy

There may also be some pitfalls you should be aware of and it's important to discuss each of your agendas before buying. If you have very different outlooks for the future, this could cause problems. You should maybe agree at the outset a minimum length of time to keep the property. This way you both have security and stability for a set period.

Make sure you talk through all possibilities, such as future partners, accepting career moves and what happens if one you becomes ill or even dies? It's also vital that you both consider taking insurance against all eventualities. 

Legal

Gay friends should talk to a solicitor that will understand their needs, and advise on the difference between joint tenancy and tenancy in common. With the first, the half share passes directly to the other on death, On then second, the share passes to the deceased's family or estate. By joining forces, you can help each other. If one has a large deposit, without proof of income and the other a larger salary, without a deposit - you are both useful to each other. If one party is placing a large amount of cash into the deal, then a document should be drawn up, stating that this amount should be returned, before proceeds are split. You should also have an agreement, if the share is not 50/50 or if one party pays a larger amount towards the mortgage. You should also remember that you are both jointly liable for the debt. So, if one disappears into the sunset, the other will be required to repay the whole loan.

Real Life

How the figures could work!

David and Paula were long standing gay friends, had rented property for 3 years together and were paying rent of £996 per month between them. They both had aspirations of owning their own home, but had both had problems raising finance. Paula had a deposit of £20,000, which was a gift from her parents, but no proof of income, as she had been working freelance for only 12 months. David on the other hand, did not have a deposit, but had a steady employed income as a television producer. 

By pooling resources they were able to buy a three bedroom house, at a price of £179,995 and take a mortgage of £161,995. Resulting in a monthly repayments of £1039. They both decided to take Life Assurance and Critical Illness insurance for half the mortgage each at a cost of around £20 per month each. They discussed all of the implications resulting in the other dying with their solicitors. They decided that each should receive the others share of the property, if the worse we're to happen. The only aspect of the whole deal they couldn't agree on, was how the spare bedroom was going to be used! 

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