Co-buyers urged to draw up agreement

First time buyers (FTBs) have been advised to draw up a cohabitation agreement before entering into a shared ownership agreement.

FirstRungNow supports the idea of two FTBs buying together but warned that it can lead to difficulties if an agreement is not reached prior to the purchase being made.

Managing director of the firm Helen Adams said that new buyers should try not to get wrapped up in the excitement of buying a property and should ensure that everyone knows where they stand.

"We say that if you are going to buy with someone else you need to make sure you have a tenancy in common and that you have a trust deed drawn up to identify who owns what proportion of the property," she commented.

"Also, draw up a cohabitation agreement so when you come to sell it is clear who has paid what in to the mortgage and who is entitled to what proportion of the equity, if there is any.

"The benefit of a cohabitation agreement is that if circumstances change, ie someone needs to move to another part of the country, you will have agreed that, for example, the room will be let to someone else and how that rent will be split," added Ms Adams.

Related Articles