Some Questions & Answers
How might I benefit from buying a house with other people?
Many lenders will allow second and indeed third incomes to be taken into account in calculating the amount that they will lend. This means that you should be able to purchase a property based upon your joint incomes and that a far wider range of properties will be available to you.
What if we fall out?
If, as sometime happens, people living together fall out, then a clearly defined mechanism for the resolution of disputes is contained within the Deed of Trust. If the situation becomes intolerable, then the Deed of Trust will also set out the terms of any agreement for one party to be bought out.
What if the property goes down in value?
You will be in no different a position than people owning property in their own right. If the property decreases in value then you will share any potential losses in accordance with the initial agreement set out in the Deed of Trust. It is essential that this will be set out prior to you buying the property in a fair manner. Reciprocally, if the value of the property increases, as has been the recent trend, the Deed of Trust sets out the basis of your entitlement to any gain in value.
Can we expand the Deed of Trust to include other shared costs in living together?
Yes, there are many aspects of living together that can be covered within the Deed of Trust. For example, you can define your respective contributions to living expenses such as water, gas, rates, electricity, council tax and the buildings and contents insurance. It is a totally flexible Deed giving you the power to include any reasonable terms and conditions as to ownership and occupation of the property as you and your friends require to include your particular set of circumstances.
We have included a draft Declaration of Trust. This is purely as an illustration. We have created a scenario whereby three friends, have bought a property together with the aid of a mortgage with the Abbey National, each contributing a different deposit. They have agreed that following the repayment of the original deposit contribution to any departing original buyer, any losses or profits will be shared equally.
Q & A Continued