POSTED 07 October 2015

A Guide to Buying a Property with Friends

House Network

There are many great reasons for buying a property with your friends. Firstly, it’s a fantastic way to bring down your expenses as you can split the mortgage payments between you, and it’s also good if you’re planning to buy a property to then rent out. Equally, you’ll all be investing your money into something you can call your own, instead of just paying rent on a house or flat.

On top of this, you can increase the likelihood of qualifying for a mortgage loan as you can club together to offer a larger deposit and support each other with your respective credit ratings. There is also of course the added benefit of living with your friends and the quality time you’ll be able to spend together in your new home.

However, it’s fair to say there’s more to this whole process than just finding a house and buying it – a whole lot more in fact. This is where House Network can help you though; in this post you’ll find lots of useful tips and tricks for securing the right new home for you and your mates.

Here’s what you need to do:

Choose your Friends

Starting with the basics, you need to all be 100% on board with this venture. This is a significant investment that you must be certain is something with which you want to go forward. Ask yourself if you’re truly happy to live with these people (if this is what you plan to do), but if you’re close friends, the answer from all is probably a resounding ‘yes’!

Be aware though that only four people can legally own a property and its land, and anyone under 18 is barred from owning land. What’s more, if you’re planning to rent out the property, think about who will be in charge of the different landlord responsibilities.

Discuss your Finances together

When you know you have the right people to buy with, you then need to discuss your financial situation and answer these questions:

-       How much can you comfortably afford to pay a month?

-       How much deposit do you intend to collectively have?

-       Do any of you have any issues with your credit rating?

-       What is everyone’s preferred repayment timeline?

-       Who is looking to start earning more over 5 to 10 years?

-       What are your long term plans for the property?

Draw up a List of Properties

Once you have all agreed to the financial side of things, there comes the quite important aspect of finding the right property! Naturally, you’ll want the best home that suits your needs, however you’re all individuals so there may have to be compromises on certain areas. Consider the following:

-       The type of property (house, flat, bungalow etc.)

-       Whether or not it falls within your budget

-       Is the property likely to increase in value?

-       What parking is available and who needs it

-       The distance from amenities and your respective workplaces

-       Is it spacious enough to accommodate everyone comfortably

-       Conversely, if you’re planning to lease the property, think about what makes it attractive to potential tenants. Especially, if you have a certain demographic in mind.

Look for a few properties and get a list together for you to choose from – this way you have a few buying options.

Put in your Offer

Predicting whether or not you’ll be successful with your offer on the first attempt is very difficult as it’s often down to external factors such as how much the seller is looking for, how popular the area/property is and how quickly all parties want to complete.

Don’t just dive in with the asking price, visit the properties and weigh up properly if they’re worth the amount they’ve been listed at. Offer what you think it’s worth, and if this gets rejected, negotiate by gradually increasing this amount, or by speaking with the seller about how much they’re prepared to sell for. With a little perseverance you can eventually come to an agreement.

Be prepared to walk away though if you feel an agreement cannot be reached.

Agree on your Ownership

As aforementioned, there can only be four legal owners, so you need to decide which names will be on the deeds and what type of tenancy you’ll have; this can be ‘Joint tenants’ or ‘Tenants in common’.

Each having differing rights which you can find out more about here on

Shop Around for Mortgage Lenders

Next, with the above decided and your offer accepted, there comes the challenge of finding a mortgage lender. See what offers your current account providers or local Building Societies can give you in terms of interest rates, repayment plans and other extras such as insurance cover.

Then, arrange a meeting with your chosen provider and you’ll face a thorough application process that details the financial history and future of you and your friends – and what exactly you wish to do with the property.

To increase your chances of having a mortgage offer, having your finances planned (see above) is advantageous, as is having a good credit history.

It’s also likely you will need to set up an account with the provider together.

Use a Reliable Solicitor

When you finally get your mortgage, you can give yourselves a pat on the back, but you’ve still got work to do. Your joint ownership needs to be made official in writing by a solicitor, as does all the other important legal documentation such as the deeds, plus they also need to carry out the property searches.

Again, shop around for an affordable option for you – if you’re in doubt you can speak to your mortgage lender as they will most likely be in partnership with some firms.

Carry out a Survey

Next, before anyone signs on the dotted line, you should get a survey undertaken to assess your chosen property. These are very important as they can give you the reassurance that the property is sound and secure and that you won’t have any unexpected problems at a later date.

Furthermore, it highlights any potential issues that could lead to you having to pull out of the sale or at least renegotiate with the seller to have rectified before the sale goes through.

Agree a Moving Date

When everything checks out, all you need to do now is sign and agree your moving date. Alternatively if this is a buy-to-let, you need to get your property ready for the rental markets. Remember to get insurance cover though for whatever plans you have, to protect your new investment.

So follow these tips and soon you could help one another to get on to the property ladder – or indeed into the rental market – in a more affordable way that benefits you all.