Exploring “non-traditional routes” to step onto the property ladder
WITH THE DREAM of homeownership becoming increasingly elusive for many young Britons, new research reveals that half (51%) of aspiring first-time buyers are now open to exploring “non-traditional routes” to step onto the property ladder, according to Lloyds Bank. Among these routes, purchasing a home with a friend (24%) or sibling (22%) is gaining consideration. While most (62%) of under-35s still prefer buying their first home with a partner, the landscape is shifting towards alternative pathways.
EXPLORING NON-TRADITIONAL ROUTES The primary motivation for firsttime buyers contemplating a joint purchase with a friend or sibling is financial feasibility, cited by 60% of respondents, and trust, noted by 56%. In fact, 14% believe this might be their only viable home-buying option. However, there are inherent challenges, as purchasing with a friend or sibling introduces unique relationship dynamics compared to buying with a partner. Financial discussions can alter friendships, though addressing these topics openly can yield positive outcomes.
FAMILY SUPPORT AND TRENDS Even the traditional “Bank of Mum and Dad” is less of a given, with nearly half (48%) of young first-time buyers expressing reluctance to seek family assistance for a deposit due to feelings of shame, compared to 34% who would approach family confidently. A notable 32% of 18 to 34-yearolds who have yet to purchase a property express indifference to the method of home acquisition, provided they secure a place on the property ladder.
PRACTICAL TIPS FOR JOINT PURCHASES With the growing trend of purchasing with friends or siblings, here are essential tips for navigating financial discussions and maintaining harmony: Open communication: Before engaging in property searches, discuss financial standings, future aspirations, and practical living arrangements. Questions like whether you prefer dogs or cats can be surprisingly relevant. Formal agreements: Disparities in deposit contributions or mortgage payments should be addressed through a legal co-ownership agreement. While it might seem excessive, such documentation prevents misunderstandings.
FINDING THE RIGHT PROPERTY Property preferences: Decide collectively on the type of property, whether a flat or house, leasehold or freehold, and its location. Determine who will make final decisions or if all will be resolved jointly. Conflict resolution: Expect disagreements, whether over garden preferences or kitchen renovations. Address issues promptly rather than letting them fester.
PLANNING FOR THE FUTURE Future-proofing plans: Recognise that circumstances, from new relationships to job relocations, may change. An exit strategy agreement is wise should one partner wish to sell or move out prematurely.
OVERCOMING FINANCIAL CONVERSATION HURDLES Discussing finances openly is crucial despite it being a sensitive topic for many. Whether it’s a traditional British reticence or past negative experiences, starting with a solid foundation can ease the process. Despite the potential benefits, 37% of those hesitant to buy with a friend or sibling fear complicating their relationship, while 32% still determine the impact on plans to buy with a partner.
SEEKING PROFESSIONAL GUIDANCE For those considering a shared property purchase, consulting a qualified solicitor is advisable to navigate the legal implications and facilitate future sales. With numerous options for first-time buyers, understanding these choices and seeking advice is paramount.