Buying a property alone is not always the right option for you, based on your finances or your lifestyle. Instead, you may benefit from buying with other people. Doing so may allow you to borrow more for a mortgage and help to share the load on repayments and other bills.
Up to 4 people can legally own a property in the UK, but make sure you’re buying with people you trust, as it is a big investment with a lot of responsibility.
If you want to own a house or flat with someone else, be it a partner, friends, or family members, Joint Tenancy is one of your options for joint ownership.
What is Joint Tenancy?
With Joint Tenancy, all the buyers will own 100% of the property and are known as joint tenants. This means you will all act as one entity owning the property, rather than it being divided up amongst you. All your names will be on the title deed.
This type of ownership has a different name in Scotland: joint owners with a survivorship clause.
Who is Joint Tenancy suitable for?
As this kind of ownership views all owners as one unit, it is generally favoured by married or unmarried couples. This will be best for them as they are committed to being such a team in their lives and will intend to live together long term.
However, there are no rules for what kind of ownership you use. If you would like to live long term with friends or family and don’t want to divide up ownership of the property you are within your rights to use Joint Tenancy.
What kind of mortgage do you need?
Joint Tenancy requires you to take out a Joint Mortgage. With a joint mortgage you will all be responsible for paying towards the deposit and the repayments.
Up to 4 people can apply for a joint mortgage. When deciding how much to lend, mortgage lenders will usually look at the income of the 2 highest earning people applying.
The financial history of each person in the joint mortgage will affect everyone else in the mortgage, including each other’s credit scores. So, it is important that you do the necessary checks
before applying for the mortgage. If one of you falls into financial trouble and cannot make the repayments the rest of you will have to make up the loss.
How does Joint Tenancy affect selling and wills?
As you will each own 100% the property, you cannot sell unless all owners are in agreement.
If you would like to move out or sell you will have to discuss with the other owners, but they cannot be forced to agree. The only way you can sell or get someone to leave the property without agreeing is if your circumstances allowed you to get a court order.
Additionally, extra loans cannot be taken out on the property without all owner’s agreement.
If one of you were to die, their stake in the house would automatically go to the other owner or owners. If there were 2 owners, then the living owner would then be the sole owner of the property. This rule means you cannot leave a portion of the property to anybody else in your will.
Can you change to a different kind of ownership?
If you later decide that you would rather own sperate shares of the property rather than the joint 100% ownership, it is possible to change your ownership to Tenancy in Common
To do this you will need to get an SEV form
to sever your Joint Tenancy. We recommend you get a legal professional to help you fill in this form and gather together any necessary supporting documents. You will then need to send these off to HM Land Registry. Once again, you will need to have the full agreement of all owners to carry out this change.
If you are in Scotland, the process is slightly different. You will need to get a solicitor to help you change the title deeds on the property.