Joint ownership, also known as co-ownership or shared ownership refers to a way of owning property which involves multiple owners. There is no limit to the number of people who may appear on the title deeds of a property, however, when applying for a joint mortgage, banks and building societies will normally only take up to four incomes into consideration when making a mortgage offer.
This could mean that you are buying with a friend, a relative or even some one that you don’t know. Joint ownership or co-buying is different from part ownership schemes, where a property is sold as leasehold on shared ownership terms (usually between 25% and 75%).
The problem faced by first time buyers, of getting a foot on the property ladder, has become the increasing focus of national discussion.
Over recent years the average house price has risen far faster than the average wage, making it increasingly difficult for those wanting to invest in their first property. In addition to this, a greater proportion of young people are looking to buy a property alone, as opposed to the traditional option of with a long term partner, making it even more difficult to obtain a mortgage on a single wage.
Joint Ownership has become a popular way to combat this problem, and is now so popular that banks and building societies are recognising it in their mortgage provision schemes, with many providers offering joint mortgages tailored to meet the buying needs of groups often comprising several people.
In addition to the normal risks and benefits of property investment and home ownership:
Joint ownership usually falls into one of the two categories below:
The preferred legal relationship of married couples, civil partners or people in long term relationships who are buying a property together. As joint tenants, both owners have an equal share of the entire property. If one partner should die, the property automatically falls to the other owner, regardless of any contradictory will statements.
Popular amongst friends/relatives buying together. Under this agreement each party owns a specific share of the property. This share need not necessarily be equal, and in the event of the death of one owner, the ownership would not automatically fall to the second owner.
In both cases, anyone named on the title deeds is equally responsible for the mortgage repayments reaching the mortgage lender, regardless of the share of the property owned.
Please note that it is recommended that in all cases of joint ownership a separate contract is drawn up between the owners, outlining the share of ownership and the responsibilities of each party involved. This is often known as the trust deed or declaration of trust.