Would you buy with a stranger? by Finance News Bulletin

Published: 09/02/07

A host of possessions 'dating' websites have sprung up offering to match up possible homeowners with strangers also desperate to get on the possessions ladderIt's the latest attempt to tackle the affordability problem facing many first-time buyers who just can't run to buy a property on their ownBut Ray Boulger, senior technological manger at mortgage broker John Charcol, says: 'I would recommend extreme caution'Any group of associates who already know each other will have issues, but if they put on't know each other these will be doubled

'Would-be buyers position their details on websites such as sharedspacecouk, co-buywithmeco

uk, and splitcoukSome charge fees of around £10 a month, other are free

Once a likely match has been found, it is up to the individuals to make get in touch with, meet up and buy a propertyRichard Cohn, founder of sharedspacecouk, says: 'We recommend people put on't rush into anything and then make sure they have all the right legal ID and insurances to cover themselves

'Crucially, none of the websites actively follow the associates through the buying process to make sure they go after the best procedures and many do not even keep track of members once the initial contact has been madeCo-buying does offer a likely solution for first-time buyers struggling to get on the possessions ladder You can get more for your money and have someone with whom to share the costsIf you desire to buy with friends or strangers, then you must sketch up a deed of trust

This legally sets out how much you are all putting in, how the mortgage is to be split and how any profits will be dividedIt also lays out the way out strategy should one partner want to sell up This text is vital because the mortgage texts and title deeds record only who owns the possessions, not in what proportionsA cohabitation accord can also set down further rules, but this is not a legal document

Each person on the mortgage is liable for the whole sum if the other associates defaultThis is Money brings you the best news, features, recommendation and comment If you were interested in this article then follow these links for more top tipsFor many, this will be a danger too far - if one homeowner can't afford their mortgage, then the others could end up with a huge load to bear - and one that could be difficult to untangle

The housing market can change fast and you may not find it easy to sell your jointly- owned home fast Lenders will let up to four borrowers to take out a loan together, but many will take account of only two incomes to work out the size of the loanAbbey, Halifax, HSBC and NatWest will look at three in certain instances, so it is always worth approaching a lender and asking them to seem at your circumstancesSharetobuy

com, a mortgage agent linked to Britannia Building Society, is one of the few that will offer loans to three co-buyers based on all their incomesIt has an exclusive contract which charges bottom plus 085% (currently 61%) with no valuation or arrangement fees

Unlike many possessions daters, Charlotte Howes and Cathryn Spence knew each other before they decided to pay money for using sharetobuycomThey have been friends since primary train and spent a day renting together before they bought a two-bedroom flat in South London last autumn'I wouldn't pay money for with a stranger

It would be terrible if you didn't really know or get on with the person you lived with,' says Charlotte, 27, a solicitorThe women bought the flat 50-50 and wrote a deed of trust location out what happens when one wants to sell upThey plan to stay in the level for two years - the word of their fixed-rate mortgage They also have to give the other three months' notice and first refusal to buy their share if they move out

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