Buying with friend/renting out room

honeychurch

I’m in the process of buying a house with a friend. Its the only way either of us could afford to get on the property ladder, and we both trust each other implicitly so i'm confident it won't end in disaster (unless the doom mongerers are right and now is not the time to buy!).

The way it is going to work is I will be living in the house, my friend will continue to live in his flatshare in the city where he works, and we will rent out a room to make this more affordable. The house has three bedrooms, so my friend will have a room to use for weekends (it’s in a popular holiday area).

I would really appreciate views/advice on how we should split the mortgage costs and rental income between us. We are both keen to have equal shares in the property, and although we could each afford to pay 50% of the total mortgage each month without too much of a struggle, in order to have a life my friend particularly would be relying on the rental income to reduce his payments. Because I will be living in the house, should my friend get a larger share of the income from the tenant – or because I’m living there and having to manage this situation should I get more? Or should we just split everything 50:50?

I would happily be responsible for the household bills as I would be there 100% of the time and my friend will already be paying these for his city place, but I think we would split things like buildings insurance between us and put together an agreed amount on a regular basis towards general buildings maintenance. Does this sound fair?

Also, how should be get this all drawn up legally? Tenants in common or Declaration of Trust?

And is there anything else I haven’t thought of?