First-time buyers ‘desperate’

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by Kay Murchie

Many young first-time buyers are so desperate to get on to the property ladder that they are clubbing together with siblings, friends and even strangers to increase their chances of purchasing a house.

According to a study by Skipton Building Society, many of these buyers are rushing imprudently into partnerships that could prove expensive.

New websites have surfaced such as gohalves.co.uk and co-buywithme.co.uk and these demonstrate the extent to which some people are going, getting together with people they hardly know.

Skipton said at least 20% of first-time buyers who have taken out a mortgage with someone other than a spouse have done so with a person they have known for less than 12 months.

Furthermore, the research illustrates that 25% of the link-ups do not pay off as borrowers fall out or split up resulting in one of the buyers out of pocket.

In instances where a partnership went bad, 10% left with nothing whereas 16% received only their share of the property’s original value. Worryingly, 40% of borrowers whose mortgages ended had signed no agreement about what would happen if the deal fell through. Over 30% of borrowers who had to sell said they regretted having bought with another person.

Property prices have increased so much that seeking a property co-buyer has become a reasonable way to get onto the property ladder according to Phillips Solicitors in Basingstoke.

The solicitor added that buyers should protect themselves and their investment. A cohabitation agreement is a good idea, this sets out the respective shares of the property and mortgage.