Instead of friends wanting to buy properties together, Ms King is getting enquiries from relatives who want to buy a property together, such as brothers and sisters and cousins.
Although relationships between family members are seen as a safer bet than buying with friends, Ms King said the risks are still very similar.
She added: “With family relations there are pros and cons to buying with them. It takes specific financial planning to make it work. When it works it is fine, but it is not as easy as it is made out to be.”
As with friends, relatives can also fall out with each other. With friends, the risks are even greater.
Ms King said: “Friends can fall out. People meet other people, want to move on then the friend gets annoyed because they don’t want to move. [Also] we are not getting the big house price rises, so friends cannot just buy the property and flip it [the way they used to], because the market is softening.
“Many parents are coming up with the deposits and they do not want to be gifting deposits to people buying with someone else, because if it all goes wrong, they might struggle to get their money back.”
For siblings buying a property together Ms King recommends they apply as tenants in common, rather than as joint tenants.
The difference, is that with the former, when a property is owned by joint tenants, if one person dies their share in the property is automatically transferred to the remaining surviving owner or owners. For example, if four joint tenants own a house and one of them dies, each of the three remaining joint tenants ends up with a one-third share of the property. This is called the right of survivorship.
Survivorship
But tenants in common have no rights of survivorship. Unless the deceased individual’s will specifies that his or her interest in the property is to be divided among the surviving owners, the interest of the person who dies belongs to his or her estate.
So under the terms of a tenants in common agreement, the proportion of deposit an individual contributes towards buying the property is clearly stated and understood.
Group mortgages have attracted the interest of a number of lenders, including Barclays and M&S Bank.
Typically, while up to four individuals can be named on the mortgage, the mortgage affordability is assessed on two named individuals, sometimes the two highest earners in the group. In other cases it is the first two individuals named on the mortgage application.
