Buying property as a cohabiting couple can be an exciting milestone, but it also comes with considerations. Unlike married couples or civil partners, cohabiting couples have no automatic legal rights if the relationship ends, or one partner passes away.
Before diving into the property market, set clear goals – discuss your reasons for buying and your long-term plans. Are you purchasing for investment or as a family home?
Assess your finances, understanding both your individual and combined financial positions. Consider things like credit scores, existing debts, savings for a deposit and other costs (land transaction tax/stamp duty, legal fees) and income stability.
Research the market
Understand the local property market and seek advice from estate agents and financial advisors. Be realistic about what you can afford and factor in hidden costs, such as surveys and repairs.
Choose the right ownership structure
In the UK, there are two primary ways to own a property jointly:
Joint tenants – both partners own the property equally. If one dies, the other automatically inherits their share, regardless of any will. It’s best for couples contributing equally and planning long-term commitments.
Tenants in common – each partner owns a specified share, which may be unequal. This is more flexible and allows you to protect individual contributions if they differ significantly and pass your share to someone else via a Will.
Cohabitation Agreements
A Cohabitation Agreement outlines each partner’s financial contributions and intentions, including who pays the deposit and ongoing costs like mortgage repayments, utility bills, and maintenance.
It also states how the property will be divided if the relationship ends, clauses for selling or buying out the other’s share.
This document isn’t legally binding in the UK but can be persuasive in court and helps prevent disputes.
Protect yourselves
Ensure both partners’ contributions are legally recognised:
Declaration of Trust – if you choose “tenants in common,” this document specifies the share each partner owns.
Life Insurance – consider policies that can cover the mortgage in case of death.
Wills – as cohabiting couples don’t automatically inherit, it’s essential to write wills outlining what happens to the property.
And we all know life doesn’t always go as planned. Discuss scenarios like:
- One partner wanting to sell or move out.
- Affordability in case of redundancy or health issues.
- Relationship breakdowns.
Clear communication is the foundation of successful property ownership as a couple. Regularly review your financial arrangements and ensure they align with changing circumstances.
By taking these steps, you can safeguard your financial interests and enjoy the benefits of homeownership as a cohabiting couple.
Legal advice
It’s important to seek legal advice to ensure that ownership agreements are fair, reflect your intentions AND that you understand your rights and obligations.
We can also help with handling the legal aspects of transferring property ownership and drafting the declaration of trust or Cohabitation Agreement.
