Buying with a friend

rob.littlefair_2

Hey everyone.

I'm new here having decided lately to buy a house with a mate of mine. I basically just want some advice (other people's stories) and to try and cover off anything I may be missing.

We're both 22 and have secure jobs at the same company (we served our time together) and are earning 23K a year each (very good chances of steady rises each year). My mate also has a part time job bringing in about a further 3K a year.

We could 'afford' to buy a small terrace house by ourselves but we both enjoy spending alot of money going out and things like that (only 22 remember!) and so decided to buy togather as to keep ourselves with plenty of disposable income.

By buying together we feel a house of around 125K would be affordable and this would get us a decent semi detatched house where we live (Blackburn).

Could anybody with experience of buying with a friend give me any tips or just othe basic house buying things to look out for?

I've guestimated that a 100% 125K mortgage will be about £800. Although we'd prefer 100% we could probably raise 5% deposite between us through borrowing off the parents but this isn't ideal.

We both live at home at the moment and so in buying a new house we would need furniture etc (although no rush as we can gradually move in).

Thanks.

Rob.

phlash

I take it neither of you are planning on getting a long term girlfriend, an unexpected move?, change of circumstances, illness?

Personally, I would avoid sharing a mortgage with friends, there is a major chance of falling out. If you do go ahead, I suggest you draw up a small contract that states now what actions would be taken should any of the above happen.

If you were entering into a business partnership with someone, you'd certainly draw up a contract despite how close friends they are. You are effectively doing the same thing with a £125,000.00 mortgage, I added the '0's on purpose, just to show you how much £125K really is.

Do not enter this light hearted or it could bite you hard.

roses

A few very important questions you should be asking yourself:

- Have you lived together before? Are either of you messy, like to listen to music loud, never clean etc?

- Do you have the same taste in furniture/decor?

- Do either of you have partners/thinking of changing job soon?

buckers_wv

Go for it I say.

I bought a house with mate in Nov 2003 for £62,500. We'd known each other for years so felt confident things would be fine, and they were. Both of us were single when we moved in and for the first 2 years this remained so. We had plenty of parties, plenty of fun, but still had plenty of privacy.

For the last couple of years we've both had girlfriends and we decided that we want to sell up and go our separate ways. So we have done. Just sold it for £104k, so thats a very tidy profit indeed.

We've not had any problems at all with money, but if it makes you both feel better, get a few "pre-nups" drawn up

IMO its a great way to get on the ladder and something that will be happening more and more.

There will be a few things which annoy you, but the pro's far outweigh the cons.

rob.littlefair_2

Cheers dudes.

phlash, obviously I can't plan for them things but I cannot see a change in jobs and we are both currently single. Obviously that can change but I don't think it would have a major impact in the shorterm.

Think we'll definately draw up a contract like you say. We are both fair people but it does need to be done, we could end up hating each other after a few years. And yeh, listing all the zeros does signify it's importance! lol.

roses, we havn't lived together before, no. However, I know he is a tidy, clean peron who has alot of respect for things. I'd like to think I'm the same although I do like a bit of loud music lol.

From our laxed house browsing (admittidly internet only atm) we do appear to like the same style of house and decor. We like the modern, simplistic look.

buckers, yeh, that's what I want. I want the fun part of sharing a house for a few years. However, I don't want to rent as it's dead money and I'd like somewhere I can call my own and carry out work on to improve it.

I was best mates with this guy from the age of four. On starting high school we slowly lost touch but met up again during some tests when applying for our jobs. We've then been mates again for the past four years. However, we don't hang out or anything. We have seperate sets of mates that we're always out with and both play for different football team etc and so we'd be out of each others way quite alot of the time.

Cheers,

wecanhelpu

It's important to decide how you will own the house - either as joint tenants or tenants in common.

In your situation I would recommend the latter

rob.littlefair_2

I'm not sure of the difference. Please explain?

wecanhelpu

As joint tenants you will both own 100% together. One cannot sell their "half" of the house. Upon the death of one of you the ownership reverts to the other.

Tenants in common each own 50% (or whatever ratio you decide). This share can be sold independently and upon death would form part of the deceased's estate.

HugoSP

May I suggest you look at a different option as to buying with a friend.

If you each bought those terraced houses that you could afford, your party/beer funds could be sorted by taking in a lodger, two if you have 3 bedrooms.

You can earn up to £4500 tax free IIRC on the HMRC rent a room scheme. You don't have the same obligations as to notice etc as you would do if you let the whole house to a tenant.

You can split bills with him, the allowance above does not include that.

You have much more flexability when you need to sell or move on. IE you don't risk the awquard situation of having one owner needing to stay put whilst the other owner needing to move on. The other poster was lucky that both he and his friend wanted to sell at the same time, you may not be.

If you fall out with your lodger you chuck him out. If you fall out with your friend who owns half of your home, things get very sticky.

Your future girlfriend could take the place of the lodger in terms of paying rent if she wanted to. In my case when my GF came to live with me I simply waited until one lodger was ready to move out then didn't replace him to keep numbers more manageable, as there were 5 adults in a 4 bed house.

At the end of the day you will have a bigger stake in the property market. You will be in a much better position to move to your next house without going into partnership with someone else, if you don't want to.

If you want to explore this avenue, PM me. I rented rooms out to students whilst in Leicester for several years.

wecanhelpu

Let me tell you a litle story.

In 1991 a friend and I bought a large 4 bed terraced house for 25k with a view to renovate it, sell and then buy another and start again. We bought the house as joint tenants.

During the renovation we were both living in the house and my friend met a woman who wanted to live with him in the house.

We ended up converting the house into 2 flats, them living in one and me in the other.

Not long after I moved out and rented out my flat. This situation continued up until last year.

My friend died while on holiday and our long forgotten arrangement reared its head. My friend had left his half of the house to his girlfriend.

But it was not his to leave. It was legally mine. And his girlfriend now rents the flat from me. But she's not happy about it and is moving out soon.

Good riddance. I never did like her anyway.

david29dpo

i did this 12 years ago. you will have ups and downs, arguments ending with "get this f**king place sold NOW!" and " have you had my milk you b***ard!" but for us it has worked. we have a nice house which neither of use could have bought on our own, now its worth 4 time what we paid for it. any advice i can give is get all money issues sorted, this seems to be what courses most arguments.