How co-ownership is helping singles join the property market By Jonathan Chancellor
Finding a partner to climb onto the property ladder doesn’t necessarily mean you have to share your lives, with co-ownership becoming an option for many.
As house, apartment and land prices soar to record levels, the barrier to property ownership becomes ever higher.
Buying into the market likely seems further away, especially when it comes to would-be buyers on the income of a single person, with no family support.
More and more are holding out on buying until they have a life partner. It is, in part, a reflection of the generational evolution of more women in the workplace, that sees most purchases these days in two names. Couples can be married or in a de facto relationship, with their ownership either as tenants in common or joint tenants.
However for some who have yet to find their life partner, but are still looking to purchase, co-ownership is becoming an option. It’s often the natural extension for some to go from renting a property with their best friend or siblings, to owning a property together.
Residential property co-ownership investment has emerged among strangers with the recent momentum in the proptech space.
The most established fractional ownership example is BrickX, which secures individual houses and apartments with investors then buying “bricks” that make up a percentage of the property.
The speculative value of the investment will change depending on its income, its valuation as well as what other investors are willing to pay.
There’s also DomaCom which encourages investments across many market segments. And there’s Co-Own.com.au where multiple parties have an investment relationship with just one party as the co-owner occupier paying rent.
The latest co-ownership proptech is Mortgage Mates, described as something similar to a dating website. Calling themselves, “the Bumble of home ownership,” they hope to match clients with other individuals who have similar housing preferences, to own and even live in a home together.
“We match two or more people to co-own a home together,” its co-founder Daisy Ashworth said.
The recent website launch included an algorithm to help find house mates to rent with as well as own.
While there are reasons to give it thought, challenges abound. Of course many traditional co-ownerships end up mired in disputation too.
Changes can occur in your life or your relationship with the friends you are co-owning with. They could find a partner, have a child, fall ill, need the money, or default on the loan.
Obviously the best way in is for a strict contract, like a prenup, although a good dose of common sense and courtesy assists, as all the paperwork in the world won’t foresee or solve every situation.
I’d suggest it’s been tried and tested on mortgage free, holiday homes.
The push into permanent abodes because of affordability issues needs a new mindset. It will also require a rethink by lenders as their requirement has been for co-owners to be also liable for every other name on the title.
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