What to consider when buying a house as a couple
Reading time: 8 minutes | Posted: 8th Mar 2021
Buying a house is an exciting time, marking a new phase of your life that’s full of possibilities. However, it’s also a huge decision to make, with a long list of legal and financial obligations that come with it. This is particularly true if you are buying with your partner.
Purchasing a property as a couple, particularly an unmarried one, comes with a set of additional risks. That makes it all the more important that you are fully informed and prepared for the process, even if things don’t work out as you’d planned. Here are all the things you need to consider when buying a property with your partner.
It may sound obvious, but before you buy a property you need to be absolutely certain that both you and your partner are on the same page. You need to make sure not only that you are both 100% committed to each other, but also that you are both equally committed to being a property owner. It may not be the most comfortable conversation to have, but it’s important that you are both honest about how you see your future before you make such a huge investment together.
You will also need to consider your common goals with property ownership. Do you want to buy a flat or a house? Do you want a forever home or just to get your foot on the ladder? Do you want a fixer-upper or a new build? You should ideally iron out all these details before you even start looking, as it will help to avoid wasted time and frustration from either party. Set aside some time with no distractions to sit down and have a thorough, honest chat about what you are both looking for.
Similarly, you need to be certain that the decisions you make will be realistic for both parties. Relationships are all about compromise, and it’s unlikely you will agree about absolutely every aspect of buying your home. However, you need to make sure that your decisions will work in a practical sense.
For example, say you each favour different locations. One location will mean you have a similar commute to work, while if you move to the other location it means your partner’s commute will double. If you decide on the second location, is this definitely something your partner would be happy with?
It’s easy to get carried away with the excitement of buying a home, but with any decision that will affect either persons’ day-to-day life it’s important to test it if you can to make sure it’s feasible. In this example, perhaps your partner could try taking a longer route to work each day to see how they feel before you make your choice. It may be that you need to consider a different location altogether that will work equally well for you both.
Money is well-documented as being one of the biggest stressors in a relationship, and overspending on your property purchase could come back to bite you in the future. It’s important to not only consider each other’s debts, savings and incomes, but also if you are looking to maintain the same lifestyle once you have bought your home. Taking all of these aspects into account will help you come up with a concrete budget that you can both commit to stick to.
Another thing that you may want to consider is leaving room in your budget for emergencies. Homeownership is full of unforeseen costs, and if the boiler breaks or the roof starts to leak, you will be in a much better position if you already have money put aside. It’s up to you to decide whether this is important enough for you both to look at houses in a lower price range.
When you are an unmarried couple purchasing a property, there are two options available to you. You can be joint tenants, where the property is bought and split equally between the two of you. You must take out a joint mortgage together (or pay cash), and if one of you dies then the property and burden of the mortgage automatically passes on to the other person. This is the most common option for couples.
You can also be tenants in common, where you don’t have to own equal shares in the property. While this option is usually taken by groups of friends or family buying a property together, it may be beneficial if there is a significant difference in earnings between you and your partner. That way you have an agreement in writing that one of you owns a larger share of the property and is responsible for paying more towards it. There is plenty to consider with both kinds of agreement, so be sure to do thorough research into both before making a decision.
Buying and maintaining a property is expensive, and being clear about how costs will be split from the start will help avoid any major problems down the line. Remember it’s not just the deposit to pay, but also estate agent’s fees, stamp duty, surveyor’s fees, legal fees, removal fees - the list goes on and on.
There’s no right or wrong way to split costs, and it’s a personal decision that will depend on your specific circumstances and outlook. You can split everything down the middle, work out a percentage proportional to each of your incomes, or pick and choose which expenses each person will pay. Whatever you decide, if you are unmarried it’s always best to get the agreement in writing (more on this below).
No one wants to imagine the possibility of their relationship breaking down, but buying a property is a huge commitment and you need to be prepared should the worst happen. This is particularly important if you are joint tenants as normally the default position will be that you own the property in equal shares, even if you have paid different amounts towards it.
You must also bear in mind that if you aren’t married the situation may be more complex. The law has not properly adjusted to unmarried couples buying property together, and as a result you have few rights tailored to this specific situation. It’s a common misconception that if you have been together for a certain period of time you are considered to be in a common law marriage. However, in the eyes of the law you are simply cohabiting, and this can have serious implications for property ownership.
Even if the house is owned in equal shares, in the event that you separate one party may be awarded a much higher claim if it can be proven that they have made more of a contribution to expenses. This could potentially mean that you get back just a fraction of what you have put into the property, leading to not only financial implications but resentment and animosity towards the other person.
While it’s a very personal decision, for the reason outlined above, if you are unmarried it’s well worth considering a Cohabitation Agreement. This outlines exactly what each person has put into the property purchase (including the cost of any items they brought with them, any pets etc). With this agreement in place, then in the event that you split up and sell the property each person will get back what they put in plus their share of the growth in the property value.
The Cohabitation Agreement will also outline things like what will happen if one of you stops paying the mortgage or wants to sell the property. Getting a Cohabitation Agreement may be an extra expense, but it can save you a lot of financial and emotional stress if you were to separate without one. There are plenty of solicitors out there who specialise in these kinds of agreements, so it’s not a bad idea to speak to a few to iron out details and costs.
There’s no doubt that there’s a lot to think about when it comes to buying a home with your partner. After all, you aren’t just purchasing property together, but committing and investing in your future as a couple.
However, having all the right conversations and the correct legal documentation in place (particularly if you are unmarried) will help make the process as smooth as possible. As with any big decision, honesty, research and preparation are key in avoiding any potential disasters, leaving you and your partner to enjoy life together in your new home.Share this: