Young people in the UK and US are not waiting for their spouses to come along to buy a house, they are turning to pooling money with friends.
A recent survey by real estate company Fairview New Homes found that 44% of 18-24 year olds who do not own property yet intend to buy a home with friends.
According to data from the joint home ownership company PACASO, the rate of home ownership with friends and unmarried people among young people increased by 21% compared to the same period last year.
In the UK, a quarter of renters are spending more than 40% of their income on housing costs, according to the UK House Building Association. A survey of 18-42 year olds by property app Zoopla found that 42% have given up on buying a home.
Ben Thompson, vice president of mortgage consultancy Mortgage Advice Bureau, said young people were considering different routes to home ownership. He said buying a home with friends had advantages, such as splitting the deposit, mortgage and other bills.
David, 41, bought the house with a close friend. They had known each other for years and were both renters. “Buying a house is so expensive,” he said. “I couldn’t afford a deposit on my own.”
Kassandra Castillo, 33, spent a year looking for her dream home, but it was way out of her budget. Kassandra chose to buy with a close friend. The process went smoothly and on schedule, but she was especially concerned about her financial and legal responsibilities to her friend.
In fact, real estate experts still note some drawbacks. Bob Steel, a mortgage manager at First Mortgage, says that combining friendship with money is often risky and doesn't end well.
“Friendships can last a lifetime, but co-owners often have to sell their homes sooner than expected due to external factors,” he said. “Relationships can fall apart.”
David is an example. He says that when his friendships started involving money, it became more complicated. David admits that he had to treat his friends as economic partners.
In his mind, he always had a feeling that the negotiations would get messy. They never actually sat down and talked about the problem.
“We had different views on the process and how it worked,” David said. “It was really stressful.”
After 5 years of living together, David had to sell the house he bought with his friend and they separated to live separately. However, he still did not regret it because the house price was too high. He also made a profit due to the difference in price when selling and when buying.
Steel advises those considering home ownership with friends to have open and honest conversations. Specifically, what will you do if you bring someone else into the home? What happens if one of you wants to sell? What will happen if someone gets sick and loses income?
“Living with anyone, friends or spouses, can lead to conflict,” says Karen Barrett, CEO of financial services company Unbiased.
She suggests co-owners have legal contracts, joint bank accounts and wills that identify heirs.
Ngoc Ngan (According to Vice )
Source
Comment (0)