Published at 14:05, Friday, 11 May 2012

There is one potential solution for first-time buyers up against huge deposits and reluctant lenders – buying a house with someone else.

Joint ownership with friends or family can be one way to spread the costs of buying and maintaining a home. So the National Association of Estate Agents says those who can’t afford to buy by themselves could consider it.

“Many would-be first-time buyers are still struggling to get on the ladder,” says NAEA president Wendy Evans-Scott. “The problem has been exacerbated by the Government’s refusal to extend the stamp duty holiday.

“Splitting the cost of a deposit, maintenance and mortgage repayments could make owning a home a more realistic aim for many.”

Karl Dixon, manager valuer with BPK estate agents in Carlisle, says buying jointly with friends or relatives is not common but is worth considering.

“It’s a very good time to do it, especially with mortgage lenders getting a bit more willing to lend,” he says. “It’s an idea that more people should look at.

“When you are splitting the cost it may be possible to jump up the ladder – instead of a small, two-bed property you may be able to afford one with a garden, for instance.”

However there are important factors to bear in mind, as Wendy Evan-Scott points out.

First, consider your mortgage options. There are mortgages specifically for joint purchases, so shop around for the best deal – and remember that with combined incomes it might be possible to borrow a larger sum.

A major advantage of buying with friends or relatives is that you are dealing with people you can trust. But make sure you agree in advance what will happen if one owner’s circumstances change.

As with any business arrangement, all the paperwork needs to bear the names of all the co-buyers – and everyone should have copies of all the documents.

Don’t forget who owns the TV. Draw up a full inventory of who owns what, to avoid confusion and arguments when one party moves out.

And since co-ownership isn’t usually a lifetime arrangement, regard it as an investment and choose somewhere with good prospects for reselling.

“Be careful what you buy,” advises Karl Dixon. “Don’t just go for the cheapest house. Make sure it has the potential for growth over the next three to five years.”

Published by http://www.cumberlandnews.co.uk