A real alternative for those trying to get on the first rung of the property ladder is to buy property in a group. Legally, up to four people can jointly own a property in England and Wales and joint ownership could be a great way to save on rent and at the same time own your own home.
Rising house prices in London has made it near impossible for first time buyers to own a property by themselves. The property web site Rightmove reports that London house prices remain strong. Commercial director at Rightmove said “Demand continues to outstrip supply. London‘s poshest addresses lead the way as well as other up and coming boroughs such as Tower Hamlets, Hackney and Haringey. This is making it harder than ever for first-time buyers to get on the property ladder and others to trade up
Group buying of a home in London seems to be the only way forward for those stepping onto the property ladder. Head of mortgages at HSBC, Carina Kemp, says: “At HSBC we have seen a 50 per cent increase in group mortgage applications this year alone. More and more people are getting round high property prices by clubbing together with friends or family to buy a home and this is a trend which we expect to continue.
Most group buyers opt to become “tenants in common” which means that each party holds separate shares in the property. This should take into consideration how much each party is putting into the property, both in terms of the deposit and the monthly mortgage payments
Mathew Lanham technical director at Homesgofast.Com states “Buying property with a group of friends by its very nature may present problems , one individual may want to leave before the others or they could stop contributing to the mortgage payments. It is therefore essential to have a contingency plan drawn up to account for changing circumstances. A solicitor can draw up a legal agreement before the purchase to cover all eventualities”
The evidence suggest that buying property in a group is here to stay.
