The Truth About Buying a House with Friends

Buying a home is one of the biggest financial commitments most of us will ever make. With house prices continuing to outpace wages, more and more people are considering pooling resources and buying a house with friends. In fact, research by Zoopla (2024) shows that one in five first-time buyers is now exploring joint ownership with someone other than a romantic partner.

At Prestige Private Finance, we’ve worked with many friends who’ve successfully navigated this path. It can be a fantastic way to get on the property ladder sooner — but it’s not without its challenges. Here’s what you need to know before taking the plunge.

The Benefits of Buying a House with Friends

• Increased affordability: 

  By combining incomes, you may qualify for a larger mortgage. This can open up better locations or larger homes that would be unaffordable alone.

  
  

• Shared costs: 

  Monthly repayments, deposit, stamp duty, and running costs are all split, easing the financial burden.

  
  

• Faster route to ownership: 

  A 2023 Halifax report found that the average first-time buyer deposit in the UK is now £53,414 — a daunting figure for many individuals, but more achievable when shared.

  
  

• Flexibility: 

  For those not ready to buy with a partner or who want to avoid renting long-term, buying with a friend can be a smart alternative.

The Risks and “Horror Stories”

It’s important to be honest about the potential pitfalls:

• Friendship strain: 

  Money has a way of testing even the strongest friendships. Disagreements over bills, repairs, or future plans can cause tension.

  
  

• Unequal contributions: 

  One friend may put down a larger deposit, pay for more renovations, or want a bigger share of the property. If not properly documented, this can lead to disputes.

  
  

• Exit complications: 

  Life changes — relationships, relocations, or career moves — can make one friend want to sell. Without a clear exit strategy, you may face difficult or costly situations.

  
  

• Credit risks: 

  If one party misses mortgage repayments, both are affected, as lenders hold all owners equally responsible.

Real-life cases reported in The Guardian (2023) highlight friendships that broke down when one party couldn’t keep up repayments, leaving the other forced to sell. These examples show why preparation is everything.

How to Make It Work

The good news? With the right advice and safeguards in place, buying with friends can be a brilliant decision. Here’s how to protect both your finances and your friendship:

1. Choose the right ownership structure

   • Joint Tenants: Equal shares; if one owner passes away, the other automatically inherits.

   • Tenants in Common: Flexible shares, allowing contributions and ownership stakes to be reflected fairly. (More on this from HM Land Registry)

     
     

2. Put it in writing

   A Deed of Trust or Cohabitation Agreement sets out how much each person contributed, how future payments will be handled, and what happens if one wants to sell.

   
   

3. Discuss the exit plan upfront

   Agree what happens if one person wants to sell or buy the other out. Clarity at the start prevents conflict later.

   
   

4. Get independent mortgage advice

   Not all lenders allow friend-to-friend mortgages, and criteria can vary. A broker (like Prestige Private Finance) can identify the most suitable products and structure the deal to protect both parties.

   
   

5. Keep communication open

   Regularly review shared expenses, future plans, and financial commitments. Transparency keeps friendships intact.

   
   

The Bottom Line

Buying with a friend isn’t for everyone, but done right, it can be a smart and rewarding way to step onto the property ladder. The key is preparation: choosing the right ownership structure, documenting contributions, and planning for the “what ifs.”

At Prestige Private Finance, we help friends buy together safely and successfully. From arranging the right mortgage to advising on legal protections, we ensure you can enjoy the benefits without the pitfalls.

Want to dive deeper? Listen to our podcast episode, Buying a Home with Someone Else, where we break down joint mortgages, ownership structures, and the practical realities of buying with a friend, family member, or partner.

If you and a friend are considering buying together, speak to us today — and let’s build a plan that secures both your home and your friendship.