Moneyfacts are urging friends who are trying to get on the property ladder, to be aware of the restrictions placed on them. The more traditional method of 5 – 10 per cent deposit, at 3.5 times salary over 25 years is still putting properties out of reach for first time buyers, so the idea of joining with friends is appealing.
Only 60 lenders offer mortgages based on multiple occupants and of these 60, over 40 only consider the highest two salaries when accessing the risk.
Our view
A valid warning. It is important also to consider what would happen if one person decides to sell or defaults on their part of the mortgage.