What is Co-Buying?

What is Co-Buying?

Co-buying is a means by which individuals can come together for the purpose of buying a property together - whether it is to live as first time buyers, invest in, or buy to let. Basically, co-buying is like rental flat-sharing. You find someone to share with, then a property to live in (or vice versa). You can afford to spend or save so much more through splitting all the bills and responsibilities. The main difference is instead of wasting money paying off someone else's mortgage you are contributing to your own, and have made it onto that all important first rung of the property ladder.

Who Co-Buys?

Who would consider co-buying?

• First time buyers - getting together with two or three likeminded individuals potentially increases the deposit amount and income to allow you to borrow a larger sum from the mortgage provider giving you your first foot on the property ladder

• Private investors - these are people who have all seen the plethora of property investment programmes on the television and wish to invest for profit or invest in the buy-to let market to boost their pensions but do not have the funds or knowledge to go it alone.

• Property Developers - are looking for co-buyers or investor to share the costs, profits and the work involved.

Why should I Co-Buy?

There are several reasons why in todays economic climate likeminded people co-buy or co-invest:

Financial -

• It allows you to increase the size of your available deposit (lenders today are now looking for a 25% deposit at least).

• Starting and ongoing costs are split between the number of co-buyers. Just imagine what you could buy with double or even triple your spending money. Afford to step onto the property ladder or buy bigger, better and sooner than you could on your own.

• Increases the amount of available mortgage.

Investment -

• It allows investors who may not have sufficient funds on their own to invest in property for profit or for the buy to let market.

Stress -

• Buying a property is possibly one of the most stressful things you will do in your life time therefore co-buying helps to spread some of this stress.

Co-Renting

If at the end of the day you do not feel co-buying is for you or you feel that it would be beneficial to co-rent with a prospective co-buyer to see if you are compatible, use the same basic principles as if you were looking for a co-buyer:

• Finding a property to rent. Consider a number of factors, personal circumstances, location and needs.

• Agree the terms of the let. On agreement, the formal documentation will need to be signed between the landlord and tenant setting out the terms and conditions of the let.

• Moving in. You will not be able to move in until you have paid your deposit, first month's rent and any associated fees.

For information on Letting Agents to help you find a property to rent, please see our Letting Agents Fact File.