Ishaan Malhi, CEO of online mortgage broker Trussle, commented on co-housing:
“Co-housing together with a friend or two to buy a house and then live in it comes with several benefits. If you’re not already on the property ladder, it can be a faster route to getting on it, and living costs will be much lower than if you were having to rent. There’s also the added security and social benefits that come with living with friends, both of which contribute to a better sense of wellbeing.
For any group of friends choosing this option, there are some important things to bear in mind:
Get legal documents written up
If you’re buying with friends, it’s important that you get a solicitor to draw up the correct documents, including some sort of declaration of trust, or a co-habitation agreement, should there be any issues or if one of you decides to sell your share in the future.
Set up a joint account
Together, you’ll be sharing the cost of your deposit, transaction costs, mortgage payments, maintenance, decoration costs and repairs, as well as household bills, so setting up a joint bank account is a much easier way of managing these payments, and that all parties pay equal amounts.
Speak to a broker about finding the most suitable joint mortgage
There are a range of joint mortgages out there, specifically designed for co-owners, but it’s important to do your research and not take an offer at face value, as there may be hidden charges or clauses. Using a broker will help to guide you through your options, and find the best mortgage for you.
Be open with each other
Buying a home is a huge financial commitment so it’s vital that you are honest with each other, especially when it comes to any financial difficulties. When a property is co-owned, all parties are liable for the mortgage payments, so if there’s a default it will affect everyone. If one person disappears, the mortgage payments still need to be paid and also, as you’re tied together financially, any bad credit resulting from issues such as a County Court Judgement would impact all parties. Another important scenario to play out before you commit to the purchase is what to do if one person wants to sell and the other doesn’t., so have the conversation in advance.
As co-owners you’ll share the cost and effort of home improvements, which will ultimately add value to your property. Many hands (and wallets) make like light work. Make the most of this joint enterprise and stay on top of DIY, gardening and decorating so if you do decide to sell at some point, then your home is attractive as possible.
Lastly, enjoy it! Living with friends can be a great experience. As well as providing companionship, it’s likely to but boost your social calendar, whether you’re entertaining together or going on Sunday walks.