Joint tenants vs tenants in common

Buying a property with a friend or partner

Buying a house or flat with another person can be an attractive option, as it means you can pool your savings towards a deposit, get a bigger mortgage, and share the burden of monthly repayments and any service charges.

Although it's most common for people to buy with one other person, it's actually possible for up to four people to be legal co-owners of a property - even if they're not related.

So, if you have friends or family members who you trust enough to make a major investment with, buying a property under joint ownership might be a good option.

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Video: joint tenants vs tenants in common

When you buy a property with another person or people, you'll either buy as 'joint tenants' or 'tenants in common'. Watch our short video to find out the key differences between the two options.

What is joint tenancy?

Joint tenancy is a type of ownership where each person owns the whole of the property - so each person has a 100% stake in the property's value.

In the eyes of the law, you must all act together as a single owner. You'd need to get one joint mortgage to cover the amount you're borrowing to buy the property.

If you want to sell the property, you must all agree.

As a joint tenant, you can't leave part of the property to someone else in a will. If one of you dies, the property automatically passes to the other owner(s). This is known as 'right of survivorship'.

Married couples that own property together would typically be joint tenants.

In Scotland, this type of ownership is called 'joint owners with a survivorship clause'.

• Find out more: How to buy a house

What is tenancy in common?

As tenants in common (or 'joint owners' in Scotland), you each own a separate share of the property. These shares don't have to be equal size - for example, you might own 50% of the property while your two children each own a 25% share.

This type of joint ownership is typically used by friends or relatives who are buying together.

As with joint tenancy, you must all agree if you want to sell the property.

However, tenants in common can each leave their share of the property to whoever they like in their will.

In theory, each owner can mortgage their part of the property separately. But in reality few, if any, mortgage lenders would be willing to agree to this, so you'll normally still need a joint mortgage.

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Differences between joint tenancy and tenancy in common

Both types of joint ownership have pros and cons, depending on your personal circumstances and your relationship with your fellow buyer(s).

The table below shows some of the basic differences between the two forms of ownership.

What is a deed of trust?

A deed of trust is a legal document that's also known as a 'declaration of trust'.

It can include details such as how much money each joint owner paid towards the property deposit, and what should happen to their money if:

• the relationship breaks down;
• one person is unable to pay their share of the mortgage; or
• you want to sell the property.

It can be a useful document to have in place if you're buying a property with other people and want to protect your financial contributions.

Joint mortgages

If you're buying a property with another person (or people) you'll normally need to take out a joint mortgage together.

Joint mortgages are usually shared by two people, but some lenders will allow up to four borrowers to share a mortgage.

If there are more than two people on a mortgage, lenders will normally only take the income of the two highest-earning people into account when deciding how much to lend.

• Find out more: mortgage-borrowing calculator

Pros of joint mortgages

You can usually borrow more money with a joint mortgage, because lenders will consider the combined incomes of two applicants when assessing how much you can borrow.

Combining your savings together to put down a larger deposit also means you can usually get a mortgage with a lower rate of interest, which could save you thousands in repayments.

• Find out more: mortgage repayment calculator

Cons of joint mortgages

It's important you trust the people you're applying for a joint mortgage with, as you'll all be equally responsible for making the repayments. If someone didn't make their share of the repayment one month, you'd have to cover the shortfall.

If you take out a joint mortgage, you'll be creating a financial link between yourself and your fellow co-owners. If one of you runs into financial problems, this could affect everyone else's credit rating, which could make it difficult for you to borrow in the future.

What are my rights under joint ownership?

As joint owners, each person is the legal owner of the property. Your rights as a joint homeowner mean:

• you can't be forced to leave without a court order;
• the property can't be sold without your agreement or a court order; and
• additional loans can't be taken out on the property without your agreement.

How do I change a joint tenancy to a tenancy in common?

If you own a property as joint tenants, you can change your type of ownership to become tenants in common - known as 'severing' a joint tenancy.

In England and Wales

You or a legal professional will need to complete an official form ('form SEV'), available from Gov.uk, and send it with any supporting documents to HM Land Registry.

If the other joint tenants haven't agreed to sever, you'll need to give them written notice beforehand.

In Scotland

You'll need to change the legal papers ('title deeds') to the property. It's recommended you ask a solicitor to do this. The other joint tenants must also agree to the change.

In Northern Ireland

If the other joint tenants agree, you'll need to fill in a 'transfer of whole' form, available online from the Department of Finance, and submit it to Land & Property Services.

If the other joint tenants don't agree, you can still sever a joint tenancy. The most common way to do this is for a joint tenant to take out a mortgage (often for a very small amount, such as £1) on their 'share' of the property, and then immediately repay the mortgage.

How do I change a tenancy in common to a joint tenancy?

In England and Wales

You or a legal professional will need to fill in a legal document called a trust deed, to confirm that you all want to become joint tenants. If you already had a trust deed, you'll need to update it.

If the title deed to your property has a restriction (for example, it restricts you from selling the property unless you meet certain conditions), you'll also need to apply to HM Land Registry to cancel the restriction by completing an official form ('form RX3'), available from Gov.uk.

You'll then need to send all your paperwork to HM Land Registry.

In Scotland

You'll need to change the legal papers ('title deeds') to the property. It's recommended you ask a solicitor to do this. The other joint tenants will also have to agree.

In Northern Ireland

If the other owners agree, you can become joint tenants by completing a 'transfer of whole and or part' form, available online from the Department of Finance, and submit it to Land & Property Services.

Ending joint ownership

As joint property owners, you all have equal rights to live in the property - so if one person wants to sell, everyone else needs to agree.

This can cause problems if, for example, you're splitting up with a partner but one of you wants to keep living in the property, or you own with friends and just one of you gets a new job and wants to relocate.

If you want to sell and the other owners don't, you may have to seek a court order. Going to court can be stressful and expensive, so it's better to avoid doing this if you can.

You may want to draw up a legal agreement (known as a declaration or deed of trust) before moving in together, which can set out things such as:

• when the property can be be sold;
• how much notice a joint owner should give if they want to sell; and
• what proportion of the sale price each person is entitled to.

Each joint owner should get independent legal advice to make sure the agreement is written correctly and fairly represents their interests.