Getting a foot on the property ladder has become even more daunting for first-time buyers, especially in the current climate. Hundreds of mortgage deals have fallen through in recent weeks and the offers that are now being put to new homeowners appear to be even more unaffordable than before.
This puts first-time buyers in a difficult position, questioning whether or not they'll be priced out of the market. Many new househunters, especially solo buyers, then feel they are left with little to no option but to continue renting or live with family for longer than planned.
But for those who aren't in a position to buy somewhere alone or with a partner, there is another option that is becoming more popular today. Getting a mortgage with a friend to split the cost and get on the property ladder quicker is on the rise, with new research from GetAgent revealing that Google searches in the UK for "mortgage with a friend" are at their highest in five years.
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James, 26, from Manchester bought a two-bed flat in Prestwich, Bury in February this year after getting accepted for a mortgage with his friend Danny, 27.
The pair have known each other for ten years and decided to take the plunge after putting into perspective the cost difference of renting versus buying in the area.
"I rented in central Manchester for a year with two other friends which was quite expensive for what it was. I then moved back home before starting to look at renting somewhere in Prestwich," James, who works as an IT Manager, told the Manchester Evening News.
"Danny and I were looking to rent in the same area so we decided to find somewhere to live together. He asked me if buying somewhere was something that I’d be willing to look at - and I said yeah.
“The flat that we bought is one that we originally viewed to rent. The estate agent told us that they were also selling it and that’s when we started to look into mortgages and how much it might cost.
"We hadn’t really looked too far into what the obligations were of having a mortgage at this point; it was just purely based on cost."
James and Danny bought their two-bed flat for £200,000 with a fixed-rate mortgage. The pair did a fair bit of renovating by putting in a new kitchen, new floors and sprucing up the bathrooms which worked out around £5,000 each.
“I always wanted to buy somewhere but I knew that I probably wasn’t going to be able to afford anything that I wanted to live in if I got a mortgage on my own," said James.
“I had a girlfriend at the time - and I don't think she wasn’t too happy about it. In all honesty I was a bit blasé about getting a mortgage with Danny at first because I wasn’t sure how far it was going to go.
"But then all of a sudden we had bought a flat and had a mortgage and her reaction was like ‘this is a bit weird’. To be honest I’ve had that exact same reaction from a lot of people.”
Despite people's opinions James says that getting a mortgage with his friend Danny has had huge benefits.
"Getting a mortgage this way massively helped me get on the property ladder quicker. At the end of the day it was all about being able to actually buy somewhere. If I tried to purchase this flat on my own it would have been a lot more difficult financially, this was probably the easiest way," explained James.
“I find that the responsibilities are easier to handle as friends. It would be a lot more amicable if there were any issues. I've seen situations that some of my friends have been in when they're in a relationship and it can get quite messy.
“Living here is more of a short term thing - we are looking at staying here for probably five years max. My aim is eventually to make money off it so I would say I see it an investment with a friend."
As much as James is happy with his decision to get a mortgage with his friend, he acknowledges that there could be some pitfalls for others.
“You’re sharing a lot of responsibility with someone that you are not tied down to as such, like you are with a relationship. You’re just friends at the end of the day, but obviously me and Danny have been close for ten years so there is a bit more trust there and we know each other inside out," he said.
“I’d only get a mortgage with someone that you think is responsible. At the end of the day I knew Danny was very good at managing his money and he has a law background so he had some good knowledge.
"He actually helped us put a contract in place for how we would handle the situation if one of us wanted to go our separate ways or pull money out of the house, any changes in circumstances like that. That made it a lot easier for me to feel confident in going through with it and seeing the benefits."
James added: “I’d absolutely recommend other people doing this if they have a friend that they can trust and someone that they want to live with. With the rise in rent costs and house prices I think it is definitely something that people should consider.
"It’s cost effective and it’s easier than trying to buy somewhere on your own."
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