25-09 - Flipbook - Page 29
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Courtney McClure believes money should never be the only reason to co-buy
"The option of becoming a mortgage-mate is particularly appealing to those already in a
housemate arrangement, and our research shows that the concept has become
increasingly popular with millennials," Paul Stokes, head of products at M&S Bank, said.
Mortgage brokers London & Country have detected a small increase in applications by
groups of three or four, but spokesman David Hollingworth says this increase does not
capture mortgages taken out by two friends, for example, and does not make clear if
applicants have "parental backing".
Though the phenomenon might be on the up, Alex McClure says when he and his cobuyers approached estate agents, "a lot of them seemed quite surprised - I think it's still
considered abnormal."
Not all lenders offer group mortgages either. Nationwide, one of the UK's largest mortgage
lenders, for example, currently has a maximum of two people per mortgage.
What about the risks?
London & Country's David Hollingworth warns that if one co-buyer wants to move on, this
could create a situation where the "other co-buyers would either have to buy them out or if
they can't afford that, be faced with the prospect of selling the property".
Even if four people's names are on a mortgage, if one or more stop paying, the mortgage
lender has the right to demand full repayments from whoever they can reach, he explains.
Sean Gilbert, a 40-year-old flooring contractor from Bedfordshire, says co-buying is "insanely
risky".
He now lives in his 16th rented property since leaving school, but says house prices have
been "artificially inflated" by the buy-to-let market, and he is "resigned to never owning".
But he would never consider co-buying. "There are virtually zero legal safeguards if
someone wants to up and leave, taking their capital with them."
'In it together'
Lucy Jordan, however, has "complete trust" in her group.
"We're all incredibly close, and if something were to happen that would mean one of us
would become financially insolvent, I would want to support them. We're all in it together. I
see us more as a family," she says.
There are, however, some ways to formalise co-buyers' obligations towards each other.
The McClures and their co-buyers have drawn up a deed of trust, which is a legal
agreement used to specify how a property is held between its joint owners.
