Why buy a house in joint names?
There are several reasons why people buy houses in joint names:
- Firstly, if you’re a couple and want to move in together, it usually makes sense to have both of your names on the deeds of the property as joint owners.
- Another popular reason is if you can’t afford to buy a property on your own but want to get onto the property ladder, so you buy a property with friends.
- The other main reason is where your parents are helping you out with purchasing a property.
Whatever your reason for buying with someone else, the chances are that splitting the costs of a mortgage and the living costs of running a house makes sharing the ownership really beneficial. You can usually generate a larger deposit and get a larger mortgage, whilst having smaller repayments because these are shared too.
Ways to own a house in joint names
Depending on how much you’re putting into a property (in terms of a deposit), and what your relationship is with the person you’re buying it with, there are different ways of owning the property in joint names.
The different ways are as joint tenants or tenants in common; depending on which of these you choose, your rights to the property if you fall out or if one of you dies, can be affected differently.
Your choice of ownership needs to be decided when you first purchase the property, so that it can be correctly registered with HM Land Registry. However, if your circumstances change later on, you can change how the property is registered relatively easily.
Joint tenancy is the most common way for a married couple to own a property. It gives them overall equal rights, ownership and control of the property, whatever happens. For example:
- If you wished to sell the property, you would both be entitled to an equal share of the sale price. Though it is worth bearing in mind that a divorce court can override this assumption especially if there are children.
- If one of you was to die, the other would automatically inherit the property without the need to go through probate.
Considerations when choosing a joint tenancy
The other benefit of this type of ownership is that no changes can be made to the mortgage i.e. a re-mortgage, without both owners agreeing to this. Similarly, the house could not be sold without both owners’ agreement.
The obvious risk here is if one of the owners has contributed more deposit or more mortgage payments than the other, as if the relationship was to break down, they would still only be entitled to the same amount as the other owner, if the property was to be sold. For this reason it is worth considering being….
Tenants in common
Many people who choose to buy a property as tenants in common do this with friends or relatives, when the plan is to get onto the property ladder and perhaps sell with the intention of buying separate properties when one of you has a significant other that they would like to live with in the future.
Another reason is when you’re not ready to commit to giving your half of the property to someone else if something was to happen to you, or if you’ve put in different amounts of deposit and don’t want the proceeds of a sale to be equal if you ended up selling the property. We can offer to draw up a trust deed ring fencing the different amounts each person has contributed.
In direct contrast to joint tenancies, owning a property as tenants in common means that you can pass on your share of the property in your will, as well as being able to specify how much of the property you own (in unequal measures, if you wish); for example, where this is proportionate to how much deposit you are contributing.
Theoretically, you could pay your own part of the mortgage separately too, but this isn’t usually an option with mortgage lenders. Whether you have a joint mortgage or not, if you wanted to sell the property, you must all still agree on this before it is possible.
As many as four people can jointly own a property as tenants in common.
How to change how your house is registered
Changing from joint tenants to tenants in common or vice versa, is relatively simple. Reasons for this can vary – you might wish to change to tenants in common if you were previously in a couple and separate, or if you become a couple or get married after being tenants in common, you may wish to change to joint tenants so that you both have equal rights to the property.
To change from one to the other, you will need to let your solicitor know that the status of the tenancy has changed and they will then make the appropriate changes.
It is also possible to change the ownership status of a house from sole ownership to a joint ownership, as part of a transfer of ownership. For more information about this, contact a conveyancer who will be able to provide you with the relevant advice.
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Advice about buying a house in joint names
If you’re considering buying a house with someone else, or considering changing from sole ownership of a property to joint ownership, we’re happy to speak to you about the best options for you, based on your individual circumstances.
Under whichever terms you decide to buy a house, we want to make sure that the process is as smooth and hassle free as possible, so will do everything that we can to make sure that you understand what’s happening (and why) from start to finish.
Bray & Bray conveyancing teams
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