house buying with friend

glasgowdan

You'll never be able to coordinate two sales with the purchase. And buying a house with a friend... isn't that the type of thing a pair of 8year old girls might say with a pinkie promise?

exiled_red

As many people have said a house share with a friend is potentially risky path for your friendship. Aside from that I wouldn't go back to living in a shared house if I didn't have to, I did it as a student, which was fine, but and went back to living in a (rented) shared house for a few months and didn't realise how frustrating living with other people could be - to be fair the people I lived with weren't terrible but you develop your own way of doing things and never really have your own space.

If you have decided that you are going to get a place together you need to think about how much of a share of the property each of you have, it sounds like you have more money to put in than your friend, presumably you would then have a bigger share which gives your friend a lesser say in things, or would you hold money back and put in the same so that you have a 50:50 split. The other thing to remember is that this probably isn't going to be forever, at somepoint circumstances in one of your lives will change meaning that one of you will want to leave/sell how would you handle this situation.

AnotherJoe

robpaton wrote: »

I am in London and looking to buy somewhere a bit more central with a good friend. We both have our own flats, both of which are valued at around 450,000. I have a small mortgage of 50,000, my friend has an interest only mortgage of 300,000 plus some savings form a previous sale (about 100,000). What is the most sensible thing to do? Should we both sell and pool the money? Or should I not sell but remortgage to raise deposit while keep ing the flat to rent out and help with the second mortgage (as another friend has suggested)?
Any advice/ similar experience welcome.
Rob

Why wouldn't you simply just sell the flat you are in and buy another one without all the faff and complexities about sharing, or becoming a landlord (have you even investigated what that involves?)

Plus in the latter case you'd be buying with a much larger mortgage plus the extra 3% SDLT which would wipe out any profit from renting out for years to come? If you rented out your current place and bought another for say £650k, SDLT alone would be over £40k and you'd have the extra interest on say another £100k at say 2% so that's an extra two to three thousand pounds every year for the life of the mortgage.

Presumably if I asked you to show your financial workings for becoming a landlord it would involve a fag packet ?

As for sharing, well everyone else has raised the issues, and in addition to all those, there's the question of exiting that agreement and the costs and disputes that can arise when that happens.

david_a

If you are determined to live with your friend in central London would it be worth considering letting out both your flats and renting one between you. If you tried this for 12 months you could see how sharing goes and then decide whether to buy together.

Mulder00

The most sensible thing to do is not to buy with this friend, unless you intend on marrying them and living with them forever.

troubleinparadise

Now I'm much longer in the tooth, my instincts would be to counsel not to do this for all these reasons already posted.

But I did do it, 30 odd years ago, back in London in the 80's.

I bought with a friend, as neither of us could afford to buy on our own. We had a contract drawn up between us as to all the aspects of joint ownership and the future sale - and it worked brilliantly!

I was the first to want out, we agreed a sum of money, my friend took on and increased his mortgage, and we parted ways.

We are still friends all these years later, godparents to each other's children, and laugh about the good times we had then.

So it can be done - but perhaps we were very lucky in that our personalities are very similar, and we always trusted and respected each other.

Should have married each other!

(we paid £75k for a maisonette flat; they're selling for £1m now - perhaps that was the mistake we made! :eek:)