03/09/2024
A property purchase involves a considerable financial outlay and represents a significant commitment.
According to the latest figures from the Office for National Statistics (ONS), the average house price in Chester in June 2024 was £273,000, up 4.9% from June 2023, with first-time buyers paying an average of £225,000 for their properties.
Property prices in Bolton are slightly less, with first-time buyers paying around £167,000 for their first homes in June 2024, an increase of 6.9% from the previous year. The average house price for all buyers in the town is £200,000, also a rise of 6.9% from June 2023.
The increase in property prices reflects the general trend across the UK as a whole, with prices having risen all over the country in the past year. In the North West, there has been a rise of 3.7% in property prices between June 2023 and June 2024.
Higher prices mean more people are joining forces to get on the property ladder and buying a home with a partner, relative, or friend is becoming an increasingly popular choice.
However, joint property ownership has particular legal implications, and it is crucial to understand the differences between the way property can be held before committing to a purchase.
In England and Wales, there are two ways that property can be jointly owned by two or more people: as joint tenants and as tenants in common.
Joint tenants
Some of the key features of a joint tenancy include:
- You can have up to four owners in a joint tenancy.
- Joint tenants do not own specific shares in a property. For example, it doesn’t matter if someone paid more of the deposit or contributes more towards the mortgage, as joint tenants, each co-owners owns the entire property and has equal rights over it.
- Joint tenants are treated as a single legal entity.
- Joint tenants must get one mortgage between them.
- If you sell the property, any proceeds from the sale are split equally.
- As joint tenants, you cannot give away a share of a property in your Will. Rather, the property automatically passes to the other owner, or owners (known as the ‘right to survivorship’ rule).
- This form of property ownership is often chosen by married couples or civil partners, who are happy for the survivor to be the absolute owner.
Tenants in common
Owning a property as tenants in common means:
- You can have up to four named legal owners.
- Each co-owner owns a separate share in the property, and these can differ in size. For example, two owners can stipulate that there is a 50/50 split, or say whether there are unequal percentages of ownership, such as 60/40, or 70/30. If there are more than two owners, this can be reflected in the percentage split, with shares split in whatever way owners choose, providing the total amounts to 100 per cent.
- The property does not automatically pass to the other owner(s) if one owner dies.
- Owners can pass on their share of the property in their Will.
- Each owner receives their respective share of the proceeds if the property is sold.
- A tenancy in common is usually favoured by friends or family members who have decided to buy a property jointly, but with unequal financial contributions, which they want to be reflected in the ownership structure.
- Buyers who have children from a previous relationship also often prefer to buy property jointly as tenants in common as this form of ownership ensures their share of the property can be preserved for those children. Choosing a joint tenancy would mean the property would automatically pass to the surviving owner(s) in the event of their death, bypassing the deceased’s children.
- Tenancies in common can be more complicated than buying as joint tenants. For this reason, many people choose to draw up a declaration of trust for additional protection. This is a legal document that records how a property is owned by multiple individuals.
Joint tenancies and tenancies in common each have their own advantages and disadvantages. What form of joint property ownership works for one person, may not work for another.
Married couples and those in committed relationships might decide that buying as joint tenants is the right choice for them. However, for friends making unequal contributions towards a property purchase, buying as tenants in common can often be the better bet.
If you are considering buying a home with another person, or several people, it is crucial to understand the differences between joint tenancies and tenancies in common before you make the initial purchase. A solicitor can tell you more about the legal implications of both forms of joint property ownership and advise on the best way to proceed.
Property Solicitor Greater Manchester
Buying a property is one of the biggest legal transactions you can undertake. Mistakes can prove costly, and it is vital to instruct an experienced solicitor to advise on the best way to structure your purchase to ensure it is best for you.
At Russell & Russell, we provide efficient, convenient and cost-effective conveyancing services to clients across Bolton, Atherton, Bury, Chester, Farnworth, Horwich, Middleton and across the North West.
Our property law solicitors have a wealth of experience and knowledge of all aspects of conveyancing. The firm is accredited under the Law Society Conveyancing Quality Scheme, the recognised quality standard for residential conveyancing practices.
We have many years of experience assisting a variety of clients buying and selling properties and will ensure your purchase is structured in your best interests.
If you are looking for a conveyancing solicitor to help you with a residential property transaction, please get in touch with Russell & Russell Solicitors. Call us on 0800 103 2600 or make an online enquiry.
Please note that this article is meant as general guidance and not intended as legal or professional advice. Updates to the law may have changed since this article was published.
Please note that this article is meant as general guidance and not intended as legal or professional advice. Updates to the law may have changed since this article was published.