Shared home purchases on the rise as Brits struggle to get on the ladder

Many Brits now considering home ownership with friends, family and unmarried partners to get on the ladder.

Related topics:  Property
Warren Lewis
14th July 2014
Property

More than three quarters (77 per cent) of planned property purchases in the next two years will be made jointly, with two in five (39 per cent) of these transactions between friends, family members, and unmarried couples.

New research from Santander Insurance highlights the increasing trend for shared home purchases between two people who are not married, with 22 per cent of those who are planning or considering a joint purchase in the next two years doing so with their unmarried partner. Over one in 10 (13 per cent) of those hoping to buy will share the purchase with their parents, while 4 per cent expect their home purchase to be made jointly with someone else such as a friend or other relative.

This contrasts with current figures, where just 7 per cent of people own a home with an unmarried partner, 3 per cent with their parents and 2 per cent with a friend or other relative.

Santander’s study highlights that almost half (44 per cent) of existing joint home owners have no life insurance cover and a further 27 per cent of those who are planning or considering joint home ownership have no plans to buy it. The research also shows that of those planning a joint purchase, unmarried couples are almost twice as likely as married couples (39 per cent versus 21 per cent) to do so without life insurance.

Santander is reminding all joint homeowners – regardless of their relationship – of the importance of life cover, to ensure co-owners, family and dependents are protected, should something happen to either party.

The main reason for buying jointly, cited by 23 per cent, was that shared ownership is the only way they can get a foot on the ladder. Only a fifth (21 per cent) of those planning a joint purchase will do so simply because they want to live with the other person and 16 per cent will buy jointly because it will leave them less financially stretched. Fifteen per cent will do so in order to afford a bigger property and nine per cent of those hoping to buy jointly in the next two years say their main motivation is taking advantage of a good investment opportunity.

Alan Mathewson, Head of Santander Insurance, said:

“Sharing the purchase of a property, whether that’s with friends, family or a partner, is a great way to spread the financial burden of home ownership. Most people entering into a home purchase will be looking to keep costs down, but we’d urge people not to cut corners when it comes to life cover, as it provides a vital safety net for those around you.”

When asked how they would cover the remaining financial commitments in the event that the person they own a home with was unable to make them, only 38 per cent said they would do so through their own financial means. A quarter say they would rely on the other person’s life insurance, 17 per cent would be forced to sell the property and 9 per cent would seek financial help from family and friends. Six per cent of those questioned would risk repossession.

Mathewson concluded:

“Our research highlights that the majority of those who jointly own or hope to do so, would not be able to cover the full financial commitments by themselves, which really does highlight the importance of life insurance cover,”

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