It may be the only option for some people…

“How do I get onto the property ladder?” is a very commonly asked question today. With house prices almost constantly increasing and lenders willing to advance funds being more cautious to all but those with the most impressive finances, buying a property is hard. If you’re not with a partner who you want to purchase with and you just don’t have the funds to buy on your own then what are the options?

The pros of buying a home with a family member

A sibling, cousin or even a parent could be a perfect partner if you’re looking to get that first foot onto the housing ladder. There are lots of advantages to buying with someone you’re related to, including:

• You know each other already. Of course, this can have downsides if your family member is a bit manipulative or less than trustworthy. But hopefully, prior knowledge of each other means that you’ll be able to support each other through the purchase and deal helpfully and proactively with any issues that arise.
• The deposit requirements aren’t quite so stringent. If you’re buying alone then you will need 10 – 20% of the purchase price already in savings. If you’re buying with a family member then you’ll only need to have saved 5 – 10%, as they will provide the same, so the pressure to have a sizeable deposit is much less.
• The mortgage costs are shared. A mortgage arrangement fee alone can tip four figures and then you also need to consider the other purchase costs, such as solicitor’s fees and taxes. If you buy with a family member then all of these are shared so the financial burden you bear for making the purchase is halved.
• Your monthly outgoings will be less too. If you’re sharing the mortgage then you’re also sharing the mortgage repayments. So, it won’t just be your monthly budget from which the mortgage payments are taken.

What to remember if you’re buying with a family member

• Avoid a casual arrangement.

• It’s very easy for casual arrangements to end up in arguments, between the two of you and also with other members of the family. Make sure it’s clear between you before you sign anything who is putting what cash into the property and who expects to own which share.

• Write everything down.

• Make sure you document the process so that you have a clear record of the arrangements under which you’ve entered into any purchase agreement.

• Don’t be a soft touch.

• If you’re buying with a family member who doesn’t have quite the same disposable income it’s still important to ensure that your ownership share is equal to what you put in. Don’t agree to take less than you should just because you like your sister/cousin/brother/mum.

• Get your own lawyer.

• It’s often useful to have separate lawyers for a property purchase so that you have legal counsel who can go through the circumstances and the finances and look at them in the context of your specific situation.

So if you are struggling to borrow money and even guarantor loans secured by your parents won't help then maybe a joint purchase with a family member is the answer.

Buying that first home will always be a financial struggle but always worth it as a long term investment and security for you and your family.