Buying a home with friends or siblings

General guidance, not a personal recommendation. Lender criteria, insurance terms and costs depend on the product and your circumstances. Numerical examples are illustrations unless expressly identified as an individual quote. Check current terms with your adviser and tax or legal points with the relevant specialist.

With prices where they are, buying with a friend or sibling is a rational response: pooled deposits, pooled incomes, shared bills, and a foot on the ladder years earlier than going solo. Lenders are entirely comfortable with non-couples buying together, the mortgage works the same way. What's different is everything around it: how you own, how you'd exit, and what happens when one person's life changes. Those are solvable problems, but only if you solve them before completion, not after the first argument.

The mortgage mechanics

Up to four people can be on the legal title, and lenders will typically have up to four applicants on the mortgage, though many assess affordability on the two highest incomes only, while a number of lenders count more. That lender-by-lender difference matters enormously for three or four friends buying together, and it's a placement question we deal with directly. Everyone on the mortgage is jointly and severally liable: each of you is on the hook for the whole payment, not your "share". If one person stops paying, the lender pursues everyone, and everyone's credit file takes the damage.

You'll also become financially associated on your credit files, their future credit behaviour influences how lenders see you for as long as the link exists. Choose co-buyers like the financial partners they are.

Joint tenants or tenants in common?

Two legal forms of co-ownership:

• Joint tenants: you own the whole together with no separate shares, and if one owner dies, their interest passes automatically to the others. Standard for couples; almost never right for friends.
• Tenants in common: each owner holds a defined share, equal or unequal, which they can leave in their will. This is the structure friends and siblings should almost always use, because it lets shares reflect unequal deposits and keeps each person's stake part of their own estate.

The deed of trust: not optional

A deed of trust (or declaration of trust) is the document, drawn up by your solicitor, that turns assumptions into rules. A good one covers:

• Shares: who owns what percentage, reflecting unequal deposits or an agreed formula for deposit-back-first then equal split.
• Running costs: how mortgage, bills, repairs and improvements are split, and whether paying for improvements changes shares.
• The exit mechanism: what happens when one person wants out. Typically: remaining owners get first refusal to buy the leaver's share at an independently valued price within a set period, failing which the property is sold. This single clause prevents most co-ownership disasters.
• Trigger events: what happens on death, on a partner moving in, on prolonged non-payment by one owner.
• Dispute resolution: how deadlocks get broken.

It costs a few hundred pounds alongside the conveyancing and is the best money in the whole transaction. Pair it with wills for each owner, under tenants in common, a deceased owner's share goes via their estate, and you want to know where.

Tax and stamp duty wrinkles

First-time buyer stamp duty relief only applies if every buyer qualifies, one friend who's owned property anywhere before, and the relief is lost for the purchase. Similarly, if any buyer already owns another dwelling, the additional-property surcharge can apply to the whole transaction. Run the combination of buyers past your solicitor before offering, the wrong line-up can cost five figures, and sometimes restructuring (for example, a different mix of who's on the title versus the mortgage) changes the answer. Joint borrower sole proprietor (JBSP) structures, where someone supports the mortgage without going on the deeds, occasionally help here, with advice.

Plan the ending at the beginning

Most friend-purchases have a natural lifespan, a few years of cheaper living and equity-building before careers, relationships or geography intervene. Agree the intended horizon up front, put the exit mechanics in the deed, and revisit annually. And insure the structure: life cover for each owner sized so survivors aren't forced into a fire-sale, and income protection so one person's illness doesn't sink the household. We arrange both alongside the mortgage as standard.