What you need to know about buying a property with friends

Group of four male friends gathered round a laptop

If you’re struggling to get on the housing ladder, then you may have considered buying a property with friends as a way to purchase your first home. While this can be a great way to buy a house, make sure you understand all the implications before embarking on this new adventure. Here’s a roundup of what you need to know about buying a property with friends:



There are potential financial benefits to buying a property with friends. You will possibly need less of a deposit if there are more people to contribute, meaning you might be able to buy a home sooner than if you were saving the deposit alone. The running costs will be shared, and therefore your monthly expenses could potentially be less. However, don’t forget you may have maintenance costs that you wouldn’t otherwise have when renting.

Depending on the financial situation of the people you are purchasing a property with, you may be able to buy a home that is more expensive, larger or in a better area than you could have afforded on your own.


Things to consider

Living with other people isn’t always an easy option. What happens if you fall out with your housemates? If you have bought a property together, it’s not as simple as giving notice and moving on.

It’s often simple things that people argue over when living together, like emptying the dishwasher or forgetting to top up the electric meter. Before starting the process of finding somewhere to live, discuss with your potential housemates how payment of bills will be arranged, division of chores and any other arrangements that you need to have agreed on before committing financially. This will also give you an idea as to whether you are compatible as living companions – just because they’re a great friend doesn’t mean you should buy a house with them!



It’s not just sorting out how much deposit you are all going to contribute and what type of property you can afford to buy. You need to consider how the finances are going to be arranged for the ongoing costs such as mortgage payments, any service charges, household bills and maintenance.

Will you all pay an equal amount? What if someone has a significantly smaller room, will they pay less than the rest of you?

What happens when someone can’t afford to pay their share, or you lose your job? How will you handle those situations?

You are going to need to share information about your income, debt, affordability etc. If this makes you uncomfortable or you are not willing to divulge your financial circumstances, then you might want to reconsider if buying with other people is the best option for you.

If you choose to set up a joint bank account with your housemate to pay for the property’s ongoing expenses, then make sure you understand the implications of connecting your finances to another individual and the impact it could potentially have on your credit rating. You may want to consider getting professional advice about your financial situation, find out more about the benefits of this here.


Getting a mortgage together

If you choose to get a joint mortgage with a friend, then be aware that you are both liable for the mortgage debt. This means if your friend is unable to pay their financial share one month, you will still have to cover the full monthly payment to the mortgage company.

When buying with another person, you may want to ensure that you are ‘tenants in common’ rather than ‘joint tenants’, so that if you died your next of kin would receive your share of the property and it wouldn’t just pass straight to your friend.


Legal agreement

You will want to get legal documents such as a cohabitation agreement and deed of trust drawn up to clearly state how the property is divided and what should happen under specific circumstances like if one party wishes to leave, sell their share or unexpectedly dies. These documents are legally binding, and each person will have to stick to the agreement no matter what happens in the future.


Are you all on the same page?

Take stock of what everyone’s current living and financial situation is. If you are all renting, how much notice do you have to give your landlord? Does everyone have the deposit saved or do you need to wait for a few months so that extra funds can be put aside? Make sure you all know what the plan is and how long things are likely to take. It’s not going to work if one of you wants to move in the next couple of months, but the other person wants to wait until next year.


Everyone gets a say

You may have been dreaming of owning your first home for some time, planning how you would decorate it etc. But remember, when living with others everyone gets a say in how the communal areas are decorated and what sofa you buy. The property may also need white goods such as a washing machine or fridge freezer purchasing. Consider making a list of the expensive or more significant items that are bought and who paid for them so that if circumstances change in the future, it’s clear who contributed to what.


Moving forward

While there is a lot to consider when purchasing a property with other people, there are also many benefits. It can sometimes feel scary to live alone and having the support of those close to you can be invaluable in making that transition to homeowner.

Keeping the lines of communication open and being clear about your expectations is key to having a harmonious living arrangement. If you nail that aspect, then buying a home with friends could be a great way to get yourself on the property ladder.

Life Centred Financial Planners help individuals, businesses and families achieve the best quality of life they can with the resources they have. Life Centred Financial Planners are passionate about working with you to help you achieve your life and financial goals, get control of your finances to enjoy a brighter financial future.

Based in East Sussex we service clients across the South East, Sussex, Kent and the whole of the UK including smaller towns such as Ashford, Battle, Bexhill, Bodiam, Brighton & Hove, Cranbrook, Crowborough, Eastbourne, Hailsham, Hastings, Heathfield, Herstmonceux, Lewes, Mayfield, Newhaven, Rye, Seaford, Sevenoaks, Tenterden, Tonbridge and Tunbridge Wells.