Would
You Buy A House With A Stranger?
By Simone Robinson
Gaining a foothold on the property ladder is becoming harder
and harder for more and more people. The ‘cost of housing
sufferers’ who receive the most attention are the young
looking to buy their first house plus the essential workers
(nurses, teachers, emergency services personnel) who cannot
afford to live near to the places they work, particularly in
the South of England.
But
what of the recently divorced, separated or widowed? What of
the ‘asset rich but cash poor’ elderly? What of
the expatriate returning to the UK after an extended time overseas?
Could
buying a house with a stranger provide all of these groups with
a viable alternative to taking out 100% mortgages or continuing
to muddle along in the rent trap?
Angela
Roberts, founder of the co-buying property network ‘You
to Share’ believes that co-buying, also known as joint
ownership, can indeed solve many of the current home ownership
issues. “Co-buying can provide a variety of would-be home
owners with a safe and seamless first step onto the property
ladder,” says Roberts. “Finding people to co-buy
with might have been a problem in the past but sites such as
www.youtoshare.co.uk provide access to a host of useful services
in addition to contact details of others looking to share the
cost of home ownership.”
In
a nutshell co-buying involves up to four people dividing the
cost of a mortgage. Like renting each person must take responsibility
for a share of the costs associated with the property but unlike
renting each ‘co-buyer’ is investing in the property.
Many banks, building societies and other mortgage lenders are
comfortable working with a four way mortgage and as long as
a ‘Deed of Trust’ is signed by each co-buyer then
all eventualities, including a get out clause, will be covered.
So,
returning to our ‘cost of housing sufferers’ listed
above how could co-buying benefit each of these very different
kinds of people:
Young
First Time Buyers
Having
saved for a deposit, either individually or with assistance
from their parents, many young people will realise that the
house of their dreams is still a fantasy as house prices continue
to rise every few months. Two or three young people could combine
their deposits to co-buy a larger property and then manage the
mortgage and other household costs between them. After a few
years they will each be able to move on to purchase their own
properties having made a profit (equity share) on their initial
co-buying investment.
Essential/Key
Workers
Since
those entering the world of nursing, teaching, policing, emergency
services or social work do not receive the highest of salaries,
co-buying may provide the property access solution. Two junior
nurses or two junior fire fighters could co-buy a property in
an area close to their place of work.
Divorce/Separation
Many
people find that coming out of a long term relationship can
not only cause tremendous emotional problems but also means
that one of the partners becomes a first time buyer all over
again. Co-buying following a relationship breakdown can mean
being able to afford a property close enough to be able to be
available to assist with child care plus, by using a co-buyer
network such as ‘You to Share’, meeting others in
a similar situation could lead to a support network.
Widowed
Losing
a long time partner can often be the trigger people need to
decide to move house – possibly to something smaller or
perhaps to a new area, closer to family for example. Co-buying
a property has numerous benefits for this group of people including
releasing equity from their previous property so they can enjoy
themselves and of course having someone to share the property
with.
Asset
Rich but Cash Poor
There
are a growing number of elderly people investigating various
equity release plans as their houses increase in value yet they
do not have access to the cash needed to paint/maintain the
said property. A new equity release option, presented by You
to Share, involves children or indeed grandchildren co-buying
a portion of their parents/grandparents house and so providing
immediate capital release to the home owner plus a means of
investment for the relatives. An added benefit of this element
is a reduction in the full impact of Inheritance Tax.
Expatriates
Since
co-buying networks are mostly internet based, expatriates may
be able to invest in property with a co-buyer prior to returning
to the UK. This investment could be made over a number of years
or perhaps closer to the expatriates return. Services such as
You to Share provide ample opportunity for potential co-buyers
to specify their needs and wishes so expats could explain that
eventually they will want to live in the property they are co-buying.
With
so many people unable to access the property market Angela Roberts
believes that co-buying could be the way forward. “With
any kind of partnership there are compromises that have to be
made. The security provided by a Deed of Trust and other legal
documents, which are free when co-buyers use the “You
to Share” conveyancing provider, ensure that all parties
are protected and can feel secure in their investment.
Further
information on co-buying can be obtained from http://www.youtoshare.co.uk
Essex
based PR consultant working for Cool Cat PR
