Buying a property with another person — whether a friend, sibling, partner, or colleague — is increasingly common in the UK as house prices push individual ownership out of reach for many buyers. Co-purchasing can make financial sense, but it comes with legal and practical complexity that is often underestimated. This guide covers everything you need to understand before you proceed.
Joint Tenancy vs Tenancy in Common
When two or more people buy a property together, they hold it under one of two legal structures. This decision is not administrative — it has significant legal consequences.
Joint Tenancy
Under joint tenancy, co-owners hold the property jointly without defined individual shares. The defining feature is the right of survivorship: if one owner dies, their interest in the property automatically passes to the surviving owner(s), regardless of what their will says. The deceased's share does not form part of their estate for the purpose of the property.
Joint tenancy is most common for married couples or civil partners who want the property to pass automatically to the other on death.
Joint tenants cannot leave their share of the property to anyone other than the surviving joint tenant(s) without first converting to tenancy in common — a process called severance of joint tenancy.
Tenancy in Common
Under tenancy in common, each co-owner holds a defined share of the property. Shares can be equal (50/50) or unequal (60/40, 70/30, or any other split). Each owner can leave their share to whoever they choose in their will. There is no right of survivorship.
Tenancy in common is almost always the correct structure for:
- Friends or siblings buying together — contributions are rarely equal, and each party needs to be able to exit independently
- Unmarried couples with different deposit contributions
- Investment co-purchasers
- Anyone who wants to ring-fence their contribution for their own estate or dependants
The shares held under tenancy in common must be recorded in a legal document — the Declaration of Trust.
Deed of Trust (Declaration of Trust)
If you are buying as tenants in common, a Deed of Trust (also called a Declaration of Trust or a Trust Deed) is essential. This is a legally binding document that sets out:
- Each party's ownership share (expressed as a percentage or fixed monetary amount)
- Each party's financial contribution (deposit, mortgage payments, ongoing outgoings)
- What happens if one party wants to sell and the other does not
- What happens if one party cannot maintain their mortgage payments
- How buyout valuations are handled (independent RICS valuation, agreed process)
- First right of refusal provisions — does the other owner get the chance to buy out the exiting party before they sell to a third party?
- How disputes are resolved — mediation before court proceedings
A solicitor drafts the Deed of Trust, typically for £300–£800. It should be in place before completion — not drafted retrospectively after a dispute has arisen. Once a dispute exists, agreeing the terms of a Deed of Trust is far more difficult and expensive.
Do not rely on informal agreements or emails. A Deed of Trust is the document that protects both parties.
Mortgage Options for Co-Purchasers
Joint Mortgage
The most common structure. Both parties are named on the mortgage and both are jointly and severally liable for the full debt. This means the lender can pursue either party for the full outstanding balance if the other defaults — not just their share.
Both parties undergo a full credit check. One party's poor credit history or outstanding debts can affect the joint application's success and the rates available.
Guarantor Mortgage
A third party (often a parent) guarantees the mortgage but does not hold a share in the property. The guarantor's assets or income are used to support the application. The guarantor is liable if the borrowers default.
Sole Mortgage with Co-ownership
One party holds the mortgage; both hold the legal title. This works in limited circumstances — for example, where one party has a poor credit history — but the non-mortgage holder still has a beneficial interest in the property under the Deed of Trust, and the mortgage holder carries the full personal liability.
How Lenders Calculate Affordability for Joint Applications
Most lenders assess affordability for joint applications using both applicants' incomes. The standard income multiple is 4–4.5x combined income (some lenders stretch to 5–5.5x for high earners in certain professions).
Example: Applicant A earns £35,000, Applicant B earns £30,000. Combined income: £65,000. At 4.5x: maximum mortgage approximately £292,500.
Lenders also assess total existing debt, committed expenditure, and the impact of potential interest rate increases under stress testing. Your mortgage broker will run an affordability assessment before recommending products.
Stamp Duty Land Tax (SDLT)
SDLT becomes more complex when one co-purchaser already owns property.
- First-time buyer relief: both parties must be first-time buyers to qualify for SDLT first-time buyer relief (0% on first £425,000, 5% from £425,001 to £625,000). If one party already owns property, neither buyer qualifies for the relief.
- Higher rate for additional dwellings: if either co-purchaser already owns a residential property anywhere in the world, the 3% SDLT surcharge for additional dwellings applies to the entire purchase price of the co-purchased property — not just that party's share.
This can add significant cost. On a £300,000 purchase, the additional dwelling surcharge adds approximately £9,000 to the SDLT bill. This must be factored into the purchase costs at the outset.
What Happens If One Party Wants to Sell?
This is the most common source of disputes in co-purchased properties. If one party wants to sell and the other does not, and there is no Deed of Trust governing the process, the options are:
- Negotiate an agreement — one party buys the other out, or both agree to sell
- Apply to court for an Order for Sale under the Trusts of Land and Appointment of Trustees Act 1996 (TOLATA) — the court can compel a sale, but this is expensive, adversarial, and time-consuming
The Deed of Trust should set out the process before this situation arises. A well-drafted deed will specify a notice period, a first right of refusal for the remaining co-owner, the basis for valuation, and an agreed timescale for completion of any buyout.
What Happens If One Party Dies?
- Joint tenancy: the property automatically passes to the surviving co-owner(s) under the right of survivorship. The deceased's estate has no claim.
- Tenancy in common: the deceased's share passes according to their will. If there is no will, intestacy rules apply — which may mean the share passes to a spouse, parents, or other family members rather than the co-owner. This can be a significant problem for unmarried co-purchasing friends or partners.
Both parties should have up-to-date wills in place. Co-purchasers who are not in a relationship should be explicit in their wills about what they want to happen to their share.
Buying Out a Co-Owner
If one party wants to exit the co-ownership:
- Agree the valuation: typically via an independent RICS-registered surveyor (costs £300–£600). The Deed of Trust should specify this process.
- Calculate the buyout amount: based on ownership shares and the current market value
- Remortgage: the remaining owner remortgages to a sole mortgage, releasing the exiting party from the debt
- Update the legal title: solicitor amends the Land Registry title to reflect the new sole ownership
The exiting party needs formal legal release from the mortgage — until the remortgage completes, they remain liable.
The Solicitor's Role
Co-purchasing introduces a potential conflict of interest — both parties may have different interests in how the legal documents are structured. Some conveyancing solicitors will represent both parties, but separate independent legal advice is strongly recommended, particularly where:
- Contributions are significantly unequal
- One party is in a more vulnerable financial position
- Shares are complex or based on conditions
- Either party has dependants who may have an interest in the property
Separate solicitors cost more (typically an extra £500–£1,000 each), but the protection they provide is proportionate to the asset involved.
The Key Message: Get the Deed of Trust Right Before Completion
The Deed of Trust is not bureaucratic paperwork — it is the document that determines what happens to potentially hundreds of thousands of pounds of your money if circumstances change. It should be drafted by a solicitor before exchange, agreed by both parties independently, and registered against the title at the Land Registry.
Sorting this out after a dispute arises is difficult, expensive, and emotionally taxing. Getting it right before completion costs a fraction of the legal fees you will incur trying to resolve an undocumented co-ownership dispute later.
Once you have the legal structure in place, the next step is planning what the property needs. Whether you're buying to improve together or dividing renovation responsibilities between co-owners, Renovate Me gives you a clear, step-by-step renovation roadmap — from initial assessment and budgeting through to completion.