First time buyers urged to consider joint ownership
option
Estate agents encourage buyers to club together
First time buyers having difficulty getting onto the housing ladder are being urged by estate agents to consider pooling their
finances with friends and family in order to buy their first homes.
With the continued economic downturn preventing many would-be homeowners from raising large deposits from reluctant
banks, the National Association of Estate Agents (NAEA) believes buying with family or friends could help to spread the costs of
buying and maintaining a home.
The NAEA's latest housing market for October has revealed a month on month drop in the level of first time buyers entering
the market reflecting the worsening economic situation. In October, this important section of the market made up only 20 per
cent of overall sales compared with 23 per cent in September, a dip of three per cent.
Mark Hayward, President of the NAEA, said:
"This latest data from our October market report shows that the situation for first time buyers isn't getting better anytime
soon. While Government housing schemes such as Firstbuy and Newbuy are in place, they are failing to meet demand, with
only 250 people signed up to Newbuy in the first four months of its operation.
"Joint ownership can, in the right circumstances, offer a way of avoiding the high costs associated with buying a property. By
splitting the deposit, maintenance fees and mortgage repayments, this could make owning a home a more realistic aim for
many would-be first time buyers.
"It is important to remember, however, that this option requires a lot of trust, transparency and above all good planning. With
a house likely to be the biggest purchase of a lifetime, there is a real need to view it as a business arrangement to avoid
problems after moving in."
For anyone considering a joint ownership arrangement, the NAEA recommends the following:
Consider your mortgage options - There are mortgages that exist specifically for this type of purchase, so shop around for
the best deal. Remember that, with a combined income, it may be possible to attain a mortgage of higher value, giving you
greater choice of properties
Think about the worst case scenario - One of the benefits of buying with friends or family should be a high level of trust,
but that shouldn't be to the detriment of legalities. Consult lawyers about a legally binding co-ownership contract and agree in
advance what will happen if one owner's circumstances change.
Don't forget who owns the TV - Drawing up a comprehensive inventory of non-shared items or other costs, and keeping a
note of who pays for things like paint, at the start of the shared ownership can reduce confusion months or years down the
line. This should also help if one party decides to move out.
Keep paperwork in order - Remember, this is a business transaction, and any paperwork relating to the property or
mortgage must be in the names of the co-buyers. Ensure copies are made of all documents associated with the purchase to
allow them to be readily accessible to both parties.
Set a realistic timeframe - If you are buying with a friend it is likely that the relationship is, ultimately, temporary. For this
reason, co-ownership should always be treated as an investment decision and buying a house with a good potential resale
value makes sound business sense.
ENDS
Editor Notes:
About NAEA
The National Association of Estate Agents (NAEA) is the UK’s leading professional body for estate agency personnel, being part
of a group representing 13,000 members who practice across all aspects of property services both in the UK and overseas.
These include residential and commercial sales and lettings, property management, business transfer, auctioneering and land.
The NAEA is a sister organisation to the Association of Residential Letting Agents (ARLA).
The NAEA is dedicated to the goal of professionalism within all aspects of property, estate agency and land. Its aim is to
reassure the general public that by appointing an NAEA member to represent them they will receive in return the highest level
of integrity and service for all property matters. Both NAEA and ARLA members are bound by a vigorously enforced Code of
Practice and adhere to professional Rules of Conduct. Failure to do so can result in heavy financial penalties and possible
expulsion from the Associations.
For further information contact:
NAEA PRESS OFFICE
Tel: 020 3128 8181
E-mail: press@nfoppmedia.com