Joint property ownership

Joint tenancy and tenancy in common are types of co-ownership on a property. We’ll take you through what each one means, so you can fully understand and make an informed decision that works for everyone, whether you’re buying as a couple, with friends or with family.

In this article:

What is joint tenancy?

In joint tenancy, ownership of a property is equal. If one party wants to sell, the other must agree to buy them out, or for the property to be sold. When one person passes away, the other joint tenant assumes full ownership – known as the rule of survivorship. Buying a house as joint tenants is a popular option for married or co-habiting couples.

Find out more about the process of buying a house.

What is tenancy in common?

Tenancy in common means each person owns a separate share of the property. These don’t have to be equal in size, so one person could own 75% and the other 25%, for example. Up to four people can be legal owners with tenancy in common.

Find out more about buying a house with a friend.

What’s the difference between joint tenants and tenants in common?

It may seem complicated, but we’ll break it down so you can understand the differences.

Joint tenants:

Tenants in common:

What is best, joint tenancy or tenants in common?

Which type of ownership is best, depends on your needs. If you’re buying as a couple, joint tenancy is a popular choice as it simplifies things if one partner dies – the other automatically inherits the property, which avoids probate and inheritance tax issues. This mean your share in the property is secure, however you can’t choose to leave your share to someone else.

If you'd like the option to leave it to someone else, then you should consider tenancy in common. Do bear in mind that leaving your share to someone else could cause disputes and your spouse/partner may be forced out of the home, find out more about selling a house in probate.

If one person is contributing more to the deposit, for example, and you want this reflected in the ownership, tenancy in common is the better option.

One of the disadvantages of tenants in common is that it’s less straightforward. It’s advised that you get a Deed of Trust to confirm your share and what will happen if the property is sold or bought out. This will incur an additional solicitor’s fee; but it makes it simpler if you want to sell.

You can also create a Deed of Trust or Cohabitation Agreement with a joint tenancy if you want to lay out the legal rights and financial interest of co-owners in the event of a separation.

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Changing your type of ownership

Find out how to change the type of ownership of your property:

Changing from joint tenants to tenants in common:

The main reason for changing from joint tenants to tenants in common, would be if you wanted to leave your share of the property to another person. This is common for those that separate or divorce, or home owners that want to leave their shares of a property to a Trust.

To change ownership you just need to complete form SEV and send it, along with supporting documents, to HM Land Registry’s Citizen Centre. If one party hasn’t agreed to changing the ownership, you’ll need to serve them written notice, as well as filling in the form.

Changing from tenants in common to joint tenants:

The main reason for changing from tenants in common to joint tenants is if you get married and want equal rights to the whole property

To change ownership you just need to update your deed of trust, complete a RX3 form and send it, along with supporting documents, to HM Land Registry’s Citizen Centre.

Changing from tenants in common to joint tenants is more complex and less common, therefore it's likely you'll need to instruct a conveyancer to help. Use our online calculator to get a quote or contact one of our helpful Move Specialists for more information.

Buying a house with a friend

Buying a house with a friend can be a good way to get onto the property ladder. Securing a mortgage and deposit that’s big enough to cover the type of property you want can be tough when doing it on your own, especially considering the current rises in mortgage rates and cost of living. This can lead to thinking that buying a house with a friend is a good idea.

Benefits of buying a house with a friend

As a first time buyer, it can be easier to get on the property ladder when you buy a house with a friend, rather than trying to secure a mortgage on your own. As long as you both have reasonable credit scores, your combined earnings will mean you’re able to take out a bigger loan to secure the property you want. Read our guide on how to boost your credit score.

Those financial benefits stretch to both your initial and ongoing expenses, including the costs associated with buying a house, followed by bills, maintenance and repairs once you complete your purchase. From mortgage and legal fees to council tax, utilities and internet costs, you’ll split these types of things two or more ways and make significant savings compared to if it was only you paying out.

You’ll also make money if the value of your home increases, as your mortgage payments hopefully allow you build up your equity in the property. This will give you a return on your investment when you come to sell, as opposed to renting where you leave with nothing to show for the money you’ve put into someone else’s property.

What are the complications of buying a house with a friend?

Whether it’s a new partner, job or desire to move abroad, changing circumstances can often cause issues between friends who buy a house together. Fallings out are hardly uncommon either, especially between people who are living under the same roof for the first time.

It’s much harder for one of you to move out compared to if you were renting, and a change in circumstances can mean you have to put your house up for sale. This can take months, while if one of you wants to leave but the other doesn’t, you’ll need a new mortgage as well as plenty of cash to buy out the other party.

Many friendships are less of a partnership than those between boyfriends, girlfriends, husbands and wives. While you may share a bank account and/or finances with a partner, you probably won’t with a friend. This could become a real problem if they default on mortgage payments or stop paying bills you thought they were otherwise taking care of, although opening a joint bank account can be a good idea.

What should I do before buying a house with a friend?

It can be a tough thing to judge, but you need to ensure you’re going into a house purchase with someone who you not only trust, but who’s going to be financially reliable. This is to protect yourself from adversely affecting your own financial landscape, with respect to things like your credit score. You need to remember that both of your names will be on the mortgage, and their actions will have an effect on you.

It could be a good idea to try renting together first. As well as getting a good indication of how you’ll get on living together, you’ll also gain an insight as to whether your friend is going to be financially responsible enough. Regardless of whether you rent first or not, it’s crucial to do your homework as best you can to try and prevent potential issues. As well as checking both of your credit scores and comparing your income and assets prior to application, you should get a comprehensive cohabitation agreement drawn up, setting out the terms of your house purchase in a legal contract.

If you’re buying a house with a friend, co-habitation agreements are a standard practice, and nothing to feel embarrassed about. A lawyer will help to set out exactly what share of the property you each own, how much money you’re contributing to the deposit and mortgage, and who’s responsible for the costs associated with any maintenance issues. You can also determine what happens to the property if one of you dies, as well as whether rooms can be rented out and the process involved if one of you wants to sell.