Buying With Friends - Your experience?

uberteeb

Anyone bought a flat/house with a mate and got any experiences they would like to share, good or bad? I've done a search but can't find much.

A mate and I can both just about afford out own flats, we figured it's a better idea to club together and get a better place that would be more affordable.

Both guys in our mid 20's with jobs that are at the safer end of the market. Both currently single. We've been mates for years, never lived together but I don't think it would be a problem, plus he works shifts so we wouldn't be spending every second in each others company.

What do people think about buying with a friend in general? As I said I can just about afford a flat of my own, it wouldn't be quite as nice, quite as big or in quite as nice an area as I would be if I bought with a mate, what would you do?

I'd assume all the paperwork and arrangements can be taken care of relatively easily? How much would we expect to be allowed to borrow, combined income slightly over £50,000? What are the options when one wants to move out say 5 years down the line?

I'm kind of in two minds to be honest, hence this post.

Riq

You'll grow to hate him.

CLAPTON

the most important thing is to have an exit strategy

e.g. what happens if one wants to move for any reason, gf, new job or whatever...
think long and hard about it and in particular about if you are in negative equity when it happens

Jowo_2

We see loads of posts on this forum from friends and relatives that buy together and then have disputes that then ruin their relationship. This includes things like one wanting to sell up to move to a new area or move in with a partner. Some of them are now in negative equity. Some want to be bought out but can't afford to take the mortgage on.

I have loads of mates who are brilliant socially but I doubt that we'd rub along very well in close confinement as the sorts of things that I find quirky or mildly irritating about them which is easy to forgive and forget in a social capacity would be magnified when they are in close proximity.

Can you stretch to a 2 bed and have your friend as a lodger? Or can you find a cheap rental together to cut costs while you save for a bigger deposit which you can also consider a probationary period as to whether you can stand to live with them in the future?

hebe

CLAPTON wrote: »

the most important thing is to have an exit strategy

e.g. what happens if one wants to move for any reason, gf, new job or whatever...
think long and hard about it and in particular about if you are in negative equity when it happens

Absolutely this. My friend, who was never going to get married, moved out to get married. We had no exit strategy and I ended up picking up all the negative equity. Also bear this in mind when looking at fixed rate mortgages which may carry penalties for selling up early.

uberteeb

His current flatmate just lost his job and is moving out in a month or so, I told him I will move in and we will test the water for 6 months before we buy somewhere.

I can stretch to a 2 bed, as can he, but both of us want to get on the property ladder. The reason for clubbing together is that the 2 beds we can both afford seperately aren't as good as we can get if we go in together.

Plus if I ran a flat myself (after buying with a mortgage as low as 10-15%) and added in all my bills, travel to work, etc. Plus, and despite some people thinking this is a waste of money, having enough money to do what I want at the weekends, ie go out on the ale, go to the football, go for weekends away, etc. After all that is done I'd imagine most of my money would go as well. Buying together and splitting the bills,etc Will allow me to still do a fair bit of saving each month.

I'm not too worried about us annoying each other, etc. My main concern, as you would imagine, is all of the what ifs. One of us wants to move in with a girlfriend, one of us moves away from work, one of us gets a girlfriends who stays over all the time annoying the other, etc.

What we have agreed is that your half of the mortgage is your responsbility, if you want to move out with a girlfriend you are the one responsible for renting the room, etc. I assume you can get those kind of agreements written up?

Person_one

I'd buy the smaller 2 bed and get a lodger.

The problem with buying with friends (or siblings etc) is that you know right from the outset its not going to be a forever thing. There will definitely be a time when you want different things and want to go your separate ways and unless this happens at a time that's convenient for both of you, it'll be a pain, even with an exit strategy.

hazyjo

As mentioned above, the biggest worry at the moment is negative equity. Inevitably, one of you will want to move on within 3-5 years - but then you might if you bought on your own as, like you say, it'd be smaller than what you'd afford with someone else. In 3-5 years' time, you might want to be buying with a partner, and that partner (goes for either of you, obviously) might not want to live in that property you own and might not be in a position to take over your mate's half of the mortgage.

Most of what you can borrow depends on what deposit you have to put down. Do you both have the same? It can get messy later down the line if one puts all the deposit down.

Personally, I'd not do it, but plenty do/have, so it can't all be bad.

I could understand it more if the market were better, but if it continues declining, you might be left without a paddle if one of you wants out.

Jx

uberteeb

Thanks for the replies, keep them coming.

We will both be putting in the same deposit.

I don't pretend to be an expert in house buying, the exact opposite in fact. I've heard some poor/worrying things abut shared equity options. If I buy with my mate then I reckon I can save around £5k per annum.

If my options are buy average 2 bed flat on your own (only just able to afford), by 2 bed flat with shared equity, by 2 bed flat with friend (easily affordable) which would you take?

hazyjo

Definitely would buy on my own. And definitely a 2 bed over a 1 bed (especially in this market).

Your salary will hopefully go up. In a few years' time, it'll presumably be more affordable.

Remember the cost of moving though. It ain't cheap! Several thousand needs putting aside.

£5k in a year saved really isn't much in the scale of things.

Have you got a 10% deposit or more?

If you bought with a friend and one of you needed/wanted to move out, remember you might not be earning enough to officially take on the mortgage yourself, even with a lodger (plus you might hate it). Not sure they'll even take rent money into account when giving out a mortgage if it's over what you can afford. You might both be forced to sell. Again, that'd cost thousands, plus you might not have any equity. Or you might both love the flat, and both meet people and both want to stay there and one wouldn't want to move. It could get tricky later down the line. Don't presume it'll just be one of you who meets someone or wants to move out/on/someone else in!

Jx

sonastin

I would choose the 2 bed flat on my own and learn to be more wily in how I spend my money so that it becomes more affordable. But then again, I hate being dependent on someone else making the right choice at the right time to suit me - much prefer to be free to make my own decisions.