Buying a House with a Friend or Family Member: What You Need to Know
Buying a property with someone else has become an increasingly common way to get on the property ladder in the UK. Whether its siblings pooling resources, friends sharing a first home, or parents and adult children buying together, joint purchases can make homeownership accessible when it might otherwise feel out of reach.
But buying a property with someone else also brings legal, financial and practical complications that don't apply to a solo purchase. Here's what to think about before you sign anything.
The two types of joint ownership
In England and Wales there are two ways to legally own a property jointly, and the choice has significant implications for what happens if circumstances change.
Joint tenants is the most common arrangement for couples and means you both own the whole property equally. If one owner dies, their share automatically passes to the other owner, regardless of what their will says. You can't sell or transfer your share independently, and decisions about the property generally need to be made jointly.
Tenants in common means each owner has a defined share of the property, which can be equal or unequal depending on what you've contributed. Each owner can leave their share to whoever they choose in their will, sell their share independently (in theory at least), and the shares can be set up to reflect different financial contributions.
For most friend and family joint purchases, tenants in common is usually the right choice because it allows for unequal contributions and gives each person more control over their own share.
Why a Declaration of Trust matters
A Declaration of Trust is a legal document that sits alongside the title deed and records exactly what each owner has contributed and what would happen in various scenarios.
This is particularly important when contributions are unequal, when one party is paying more of the mortgage, when one party is paying for renovations or improvements, or when you want to set out clear rules for what happens if one of you wants to sell.
A Declaration of Trust costs a few hundred pounds to draw up but can save tens of thousands in disputes later. It's strongly recommended for any joint purchase that isn't between married couples.
The mortgage implications
When you take out a joint mortgage, both parties are jointly and severally liable for the whole debt. This means if your co-buyer can't pay their share for any reason, the lender can pursue you for the full amount.
Lenders will assess both incomes and credit histories, and the worst credit score will typically pull down the strength of the application. If one of you has a poor credit history, missed payments or significant debts, this can affect the mortgage rate available to you both, or the lender's willingness to lend at all.
It's worth being honest with each other about your financial situations before applying, including any debts, defaults or county court judgments. These will come up in the application anyway, and finding out at that stage can damage the relationship before you've even started.
What happens if one person wants to sell?
This is the question most joint buyers don't think about until it becomes urgent, and it's the single biggest source of disputes in joint property purchases.
If both parties agree to sell, the process is straightforward, each receives their agreed share of the proceeds after the mortgage is paid off.
If one party wants to sell and the other doesn't, things get complicated quickly. The party wanting to stay can try to buy out the other person's share, but this requires both agreement on the value and the financial means to do so. If they can't, the matter can be taken to court under the Trusts of Land and Appointment of Trustees Act 1996, which can force a sale even if one party objects. This is expensive, slow, and can permanently damage the relationship.
A well-drafted Declaration of Trust should set out exactly how this scenario would be handled, including how the property would be valued, how long the other party has to find the money, and what happens if they can't.
Stamp duty considerations
If any of the joint buyers already owns a property, the higher rate of stamp duty typically applies to the entire purchase, not just their share. This includes parents who already own their own home buying with adult children, which can add a significant cost.
There are some exceptions and reliefs, particularly for first time buyer scenarios, but the rules are complex and worth checking carefully with your solicitor before committing. We covered the basics in our guide to stamp duty.
The practical questions to discuss before you commit
Beyond the legal and financial questions, there are practical ones that matter just as much. How will you split the bills, including mortgage, utilities, council tax and maintenance? What happens if one of you wants to bring a partner to live in the property? How will you handle major decisions about renovations, redecoration or major repairs? What happens if one of you loses their job or has a change of circumstances?
These conversations are awkward but having them before you buy is much easier than having them once you're tied together legally and financially.
The full checklist
The Home Truths Guide includes 100+ essential questions to ask at every stage of buying a home in the UK, covering house viewings, making an offer, surveys, conveyancing, special circumstances and exchange and completion.
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