Buying a home is a big deal. It’s the biggest financial investment we make in our life, and it’s not something to enter into lightly.
With less people getting wed these days and house prices making it almost impossible to get on the ladder alone, more unmarried couples are jumping onto the ladder.
We break down what you need to consider if you are buying as an unmarried couple, and explore if a ‘home-owning pre-nup’ could be the right choice for you…
“The hard truth is that relationships don’t always last…”
Reality Check №1: We feel bad being a Negative Nancy, but the hard truth is that relationships don’t always last. The average age of buying a home in the UK is around 30–34, and the average relationship length for someone that age is around 10 years. You do the maths…
Reality Check №2: If you’re a married couple buying a home, if you split up the wealth locked up in your home will be shared fairly. If you’re not married, you are not legally protected in the same way. And to get your fair share can be time-consuming and rack up expensive legal costs.
It can be tricky and a bit awkward, but the best way to protect both your interests is to think it through when you’re buying. Have the conversation, consider how you want to own your home, and what feels fair.
If you’re buying with someone else, there are basically two ways you can own the home…
- Joint tenants — this is where you own everything 50/50, regardless of what you’ve contributed in terms of the deposit or mortgage payments. It also means that if one of you dies, your share automatically passes to the other.
- Tenants in common — this is where you can own shares unequally in a home (eg. 70/30). This can be for whatever reason but most couples do this on the basis of what they’ve contributed to the home.
- You can either set this out in stone at the beginning, or if you want ownership which reflects changing contributions to the home, you can use a tool like MaryR and bind it with a Deed of Trust.
- Owning in Tenants in Common also means you can determine where your share goes if you die.
Life isn’t always 50/50
In theory, 50/50 can feel like a good idea. A lot of people try it. It can feel simple and ‘fair’ way to go in on a home purchase.
In reality, couples buying together are two individual people often coming from different financial circumstances. Each has a different set of savings, different salaries (and bonuses) and the ability to contribute.
If you want your ownership to reflect what you’re contributing to the home, platforms like MaryR can make it easy.
It doesn’t have to be hard to reflect the difference in contributions in your ownership shares. It’s up to you both to determine what feels fair.
How much do Mum and Dad care?
The Bank of Mum and Dad (or the Bank of Grandparents) are involved in half of all first time purchases. So there’s a good chance they’re involved in yours. Get them to be clear with you about their expectations for their financial support (eg. is a gift or a loan?) and how they want it used. They may not want half of their hard-earned cash ending up in the pocket of your ex, or they may not care.
It’s worth having the conversation — a formal agreement can also make them more likely to support you with a bit more.
Hopefully that’s been a helpful tour through the key things to consider as you buy with your your boyfriend or girlfriend.
The ‘home-owning’ pre-nup
Time for us to plug ourselves quickly. If you and your partner want to own your home in a way that reflects what you have and are contributing to it — get in touch with MaryR.
Our platform allows you track what you own in your home, based on what you are individually putting in. All legally bound with a Deed of Trust, under the title of Tenants in Common. Think of it is an insurance in case the worst happens.
We’ll walk you through exactly what you need to do.Back to blog