BUYING a house with your best friend would seem to many like a fun and cost-friendly way to get on the property ladder.
But one woman who bought a two-bed flat with her friend has revealed it was the worst mistake of her life after they were eventually forced to sell up.
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Victoria Mortimer decided to buy the £420,000 property in Hackney, east London, with her pal in 2017 as it would have been “too much of a jump” for her to buy solo at the time.
She says they each contributed 50% of the £42,000 deposit, and they covered £600-a-month each in mortgage payments.
The 38-year-old says their arrangement worked well for the first two years but claims “things changed” when she met her now ex-partner and wanted to live with him.
She says they were unable to agree what to do with the flat at first – but eventually settled on Victoria’s friend buying her out of the property, after a long disagreement.
Victoria, who is a finance director from Hackney, said it felt like she was going through a “divorce” with her friend, and it left their relationship “irreparable”.
But then they were forced to spend a year living together after Victoria moved back into the flat in January 2020, after she broke up with her boyfriend and was unable to rent and pay her mortgage, before the process was complete.
Victoria, who posts online @theunlikelyaccountant, has since bought a place of her own – a £460k two-bed flat – and advises others to “proceed with caution” when considering buying property with a friend.
She warns people to wait until they can buy alone, and if they do choose to buy with another person they should make sure they have a declaration of trust.
This is a legally binding document that outlines the ownership rights and interests of all parties in a property.
You should also have a conversation to decide what to do if one party no longer wants to live there, she suggests.
“We had been friends for more than a decade. We were thick as thieves and never had an argument,” Victoria said.
“Ultimately it caused a rupture in our friendship because we couldn’t agree on the best way forward. It was like a divorce.
“When you break up with your partner, you’re heartbroken, but it hits differently when it’s a friend.
“Everyone who knows I went through this would say ‘I bet you tell everyone to avoid it like the plague’.
“If you’re going to do it, do it with caution.”
Victoria says she first moved into the flat after deciding with her friend to pool their resources and split everything 50/50.
“It seemed like a good basis for getting on the ladder,” Victoria said.
“At the time we didn’t think we could afford to buy individually.
“Then I met someone and I was spending more and more time with him at his place.
“I was conscious I was spending time there and not contributing.”
Victoria says she suggested renting out her room, but claims her friend suggested they sell up entirely.
“It almost had to go down a legal route,” Victoria said.
“Fast forward to September 2019, me and my boyfriend split up.”
How to get the best deal on your mortgage
IF you’re looking for a traditional type of mortgage, getting the best rates depends entirely on what’s available at any given time.
There are several ways to land the best deal.
Usually the larger the deposit you have the lower the rate you can get.
If you’re remortgaging and your loan-to-value ratio (LTV) has changed, you’ll get access to better rates than before.
Your LTV will go down if your outstanding mortgage is lower and/or your home’s value is higher.
A change to your credit score or a better salary could also help you access better rates.
And if you’re nearing the end of a fixed deal soon it’s worth looking for new deals now.
You can lock in current deals sometimes up to six months before your current deal ends.
Leaving a fixed deal early will usually come with an early exit fee, so you want to avoid this extra cost.
But depending on the cost and how much you could save by switching versus sticking, it could be worth paying to leave the deal – but compare the costs first.
To find the best deal use a mortgage comparison tool to see what’s available.
You can also go to a mortgage broker who can compare a much larger range of deals for you.
Some will charge an extra fee but there are plenty who give advice for free and get paid only on commission from the lender.
You’ll also need to factor in fees for the mortgage, though some have no fees at all.
You can add the fee – sometimes more than £1,000 – to the cost of the mortgage, but be aware that means you’ll pay interest on it and so will cost more in the long term.
You can use a mortgage calculator to see how much you could borrow.
Remember you’ll have to pass the lender’s strict eligibility criteria too, which will include affordability checks and looking at your credit file.
You may also need to provide documents such as utility bills, proof of benefits, your last three month’s payslips, passports and bank statements.
Victoria and her friend were forced to live together for a year after she couldn’t afford to rent elsewhere and pay her existing mortgage.
She said: “We couldn’t even look each other in the eye. It got to the point where she could buy me out.
“I found somewhere else that I bought.”
Now Victoria is sharing her tips for other potential buyers thinking of going down the same path.
She said: “If you think you might be able to do it on your own in the next year or two just sit tight and do it on your own.
“If you think you’re going to sell in the next two or three years, it would be harder to make money because you would have paid stamp duty potentially and have estate agent fees.
“It just makes it harder unless you’re in a really high growth area.
“Sit down and have a conversation and ask ‘what are we going to do if X, Y or Z happens?’.
Do you have a money problem that needs sorting? Get in touch by emailing money-sm@news.co.uk.
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