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Original poster

Thoughts on joint home ownership with a friend ?

16 replies

Sophiebrown85 · 26/02/2022 08:02

Hi everyone,

Sophie here, single mum with a DD who turned 13 this week. We live in a rental in a 2 bedroom apartment and the rising costs are really creating a strain. I used to work for EasyJet but COVID meant I got laid off so I was on benefits for the majority of 2020. Jobs are dead in the airline industry, so I had no choice but to change careers. Luckily, I did end up getting a job in prisons but its entry level so only earn around £22k plus I help with a few DIY jobs in the garden and interior work in weekends so that it brings it up to around £25k.

I am already 36 (and will turn 37 in March) and I am still nowhere near the property ladder. The money( a lot of it which was eaten by HMRC) from my late parents inheritance was used for my divorce case and the rest went to my sister in Australia. I do have enough savings for a deposit (From some of that money and past earnings) but the property prices are just through the roof. Having spoken to financial advisors, it turned out the only thing I can afford is" shared ownership" but I am not a big fan of it because I would need to pay rent and mortgage. I have a close friend from our EasyJet, Becky (35), who is also a fellow divorcee and is in my situation (she recently got a job somewhere too) though her daughter lives with her father based on their custody agreement.

When I discussed this with her, she offered to go in together 50:50 even though she has a larger proposed deposit and was told by my Financial Advisors that it was a wise thing to do financially speaking. She also gets huge discounts in groceries and is willing to share all the other household costs together too.

But then I have the following limitations

-Even with that we can only afford a 2 bedroom flat which means I will have to share the room with my DD Abi(whos now a teenager, which means it will be tricky but we can adjust if it comes to that until she goes off to uni or moves out). Abi says she is perfectly fine with it, but that can change quickly in future as she matures further.
-I love Becky to bits, but what if God forbid for whatever reason we have a falling out?
-Dating is not on the radar for either of us for now, but I would like to think we are still somewhat young so what if either of us meet someone in future? Will that not make things awkward in future?

OP posts:

SantaMonicaPier · 26/02/2022 08:04

Personally I wouldn't even consider this, you've outlined the risks. If you can afford shared ownership I would do that as if you choose a property which allows this you can increase your share of the ownership over time.

SeasonFinale · 26/02/2022 08:16

I disagree with the previous poster. Avoid shared ownership schemes like the plague!

There are obvious issues with sharing with a friend other than the can you live comfortably with each other?

What if one wants to sell and the other doesn't? What if one loses their job and can't pay their share or won't pay their share of the mortgage can the other pick up the slack? I would ensure if this happened then the payment could recovered from equity on sale etc. It is a good way for two singles to get into the property market and increase the equity and thus the amount they would have to use to buy separate properties in the future.

I would however look to see if there is anyway it could ve stretched to gave a 3 bed place and perhaps with 2 reception rooms so you can have separate living space even if it means being not as good an area

Original poster

Sophiebrown85 · 26/02/2022 08:22

@SantaMonicaPier

I understand, thanks for your input x. I have a problem with shared ownership really because well I wont have any money saved up to own a larger share. I did approach a couple of shared ownership developers but I was told that they try to maximise your mortgage loan , so for example the apartment I was looking at would mean that would be £1200 (£500 rent +£700 mortgage ) per month (which will be the huge majority of my salary) and I would not have any money left after the utility and grocery bills. They also only allow increments in satirising of 10% or above, so there would be no real way to save that much in the next 5 years in that situation for me.At least with a friend I retain my money in a way.

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Original poster

Sophiebrown85 · 26/02/2022 08:26

@SeasonFinale

I disagree with the previous poster. Avoid shared ownership schemes like the plague!

There are obvious issues with sharing with a friend other than the can you live comfortably with each other?

Yes exactly! All the things you mentioned is why I am in a dilemma. 3 bedroom place would be ideal, but that would mean we have to move further out by at least 25 miles and both of our jobs are in different directions, so even if I were to change DD's schools, it will be a bit difficult for us to commute. But I guess we can get around that but the main obstacle really would be that she needs to be near enough so her Daughter could visit over half terms and holidays, so theres a geographical constraint on her end.

OP posts:

Mrbay · 26/02/2022 09:01

As long as you have clear legal paperwork showing the percentages of ownership (tenants in common), I don't thinks a bad idea but to make it worth the moving and legal fees you both need to commit to staying put for at least 5 years. Property value should grow enough in this time to potentially buy separately.

Could you look at 2 beds that your bedroom could be split with a partition wall to give you and your daughter some space.

An ex council house in your area may be the way to go, normally they have large gardens and bigger rooms so there could be potential to extend and due to the dislike of council estates the houses are normally cheaper. I grew up on a council estate and had there been a house for sale when we were looking, I'd snapped it up!

ThatsALotOfPassionfruit · 26/02/2022 09:05

With shared ownership you use the increase in house prices as your deposit when you increase your share. So you don’t have to save for a deposit. You’d need money for legal fees but not the actual deposit.
Personally I’d take that over your other option. I would not want to share a room with my teenage daughter long term and personally I don’t think it’s fair on her either.

The only way house shares work ime is if you’re both single or not living with a partner.

MegaClutterSlut · 26/02/2022 09:08

I personally wouldn't, living together may not be as good as you thought or at some point you will both probably meet someone and will no longer get want to live with each other imo which will cause a huge arse ache

Cherrysoup · 26/02/2022 09:09

Say one or both of you gets a partner and they stay over loads-guaranteed falling out. You can’t share a room with a teenager, that’s just not fair on her. Who’s to say she’ll move out once she hits 18? Many 18 year olds stay, especially in the south.

BarbaraofSeville · 26/02/2022 09:12

How much is your deposit? If 'a lot of it was eaten by HMRC' that must mean that the initial amount was pretty huge as nothing is taken unless the amount is well over £300k.

As a prison officer, you could get work anywhere, so is there any scope to move to a cheaper area, where your deposit will make up a far larger portion of a property for you and your DD. Eg if you lived somewhere in the vicinity of Manchester or another major city, there would be prison work and you might be able to get back into flying in the future when things pick up.

spotcheck · 26/02/2022 09:19

I wouldn't....

It looks like you are at a point where you need to make some serious decisions about your life.
Having a mortgage on a property you described gives you less options in life, rather than more.

What about retraining so you can earn more, or moving to a cheaper part of the country ( or both)?

BeyondMyWits · 26/02/2022 09:21

When I was young and had no responsibilities this was what we did (in the 80s) to get on the ladder. Bought a crappy bedsit with my friend, did it up, sold it on , used equity as deposit to buy an apartment with her, then a 2 bed flat ... own rooms, not one on sofa bed - luxury! Then we each had enough deposit to buy our own places. Took 6 years of sometimes very hard compromise, but at the age of 26 I lived in a 3 bed that I now own mortgage free.

Would I consider it at an older age? No. Would I consider it with a child? No. It is hard to live with someone you don't love, especially if you have not done it before... imagine a lockdown, 4 walls 3 people... you need to like each other, and trust each other a lot.

Hoppinggreen · 26/02/2022 09:24

Buying with a friend can be tricky, especially if circumstances change but might be worth it if it gets you a suitable house.
BUT your plan doesn’t do that, you can’t share a room with your daughter long term

Imyourvenus · 26/02/2022 09:27

If you need to share with your dd then do not do it.

catfunk · 26/02/2022 09:32

I would only buy with the friend if you didn't have a dd. A teenager should not be sharing a room with their mum.
And if any of the 3 of you are dating it will get very messy and complicated.
I think the only option is for you to move somewhere cheaper.

chipsandpeas · 26/02/2022 09:38

no its a crazy plan, especially if you need to share

Chloemol · 26/02/2022 09:50

I wouldn’t. I would consider shared ownership. I worked with a lot of people who got on the market using this. None have had issues.

Get your name on the housing authority list, they can help with some of it.

If it’s too expensive where you are consider moving further out if you can but I would not, under any circumstances buy a house jointly with a friend

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