Buying a property and moving in together: what you need to know
Moving in together is one of the biggest decisions you can make as a couple. Whether you are buying or renting, there are a number of things to consider and it’s important to get your legal position clear from the beginning, whether you are buying or renting.
Mortgage lenders tend to treat couples similarly whether they are married or civil partnered or not. However, some mortgage lenders require you to have life insurance as a condition of the loan and single (unmarried) men are treated as a higher risk. You can get past this issue by choosing a mortgage without a compulsory insurance clause.
If you are planning on buying a property together for the first time, you will need to decide how you are going to own the property and make this clear in the property paperwork. It is also a good idea to make a will, if you have not yet done so.
Joint ownership ensures that each partner has a legal share in the property. If you split up and the property is in only one person’s name, the other person has no legal right to a share of the property. This can be changed if an agreement is drawn up or if ‘trust principles’* apply.
There are two types of joint ownership:
1. Beneficial joint tenants
This means that the whole property belongs to both of you and neither has a separate share. If one of you dies, the other automatically becomes the owner of the whole property. This type of ownership suits most married and civil partnered couples.
2. Tenants in common
The property is still owned jointly, but each of you has a separate share. If one of you has contributed more money to the property, you may decide to reflect this in your shares. If one of you dies, that person’s share can be passed on in the will or under the rules of intestacy**.
If you own a property as tenants in common, you will need a separate document or deed setting out the shares in the property and how the proceeds of sale will be divided if the property is sold. This is usually called a ’trust deed’ or a ’declaration of trust’.
If you choose ‘tenants in common’, it is important to:
- Make a ’declaration of trust’: Your solicitor will be able to draw up this legal document which sets out each person’s share of the property and what happens if one partner decides they want to sell.
- Make a will: Tenancy in common does not make your partner the automatic beneficiary of your share, so it is very important to make wills saying what you want to happen to your share if you die.
If you have already bought a property, you may not be sure how you own it. It is a good idea to find out.
How do you find out how you own a property?
For most properties, there is a record of ownership at HM Land Registry. You can get a copy from the Land Registry online service and check up-to-date information.
Moving in together
If you or your partner already own your property and one of you has moved in, it is likely that the property is only in one person’s name. This is something you need to talk about, especially if you or your partner makes contributions towards the mortgage, bills, and general maintenance of the property.
Changing the way you hold the property
Try to agree at the beginning what the original position was (i.e. who owned the property) and agree on what the new arrangements will be. Make a short written record of your agreement, preferably in the form of a declaration of trust.
You may be able to change a joint tenancy into a tenancy in common at a later date but you will not be able to change a tenancy in common into a joint tenancy.
Different types of property and rental agreements have different rules. These also depend on whether you have a council tenancy or private accommodation.
There are three main types of rented private accommodation:
- Assured shorthold tenancy – a tenancy that started on or after 28 February 1997 will be an assured shorthold tenancy unless stated otherwise in writing.
- Assured tenancy – a tenancy started between 15 January 1989 and 27 February 1997 will be an assured tenancy unless the landlord stipulated otherwise and this is in writing.
- Regulated or protected tenancy – a tenancy started before 15 January 1989 is likely to be a regulated or protected tenancy.
There are different time periods for which tenancies can last and these have different names:
- Fixed-term, which means the tenancy lasts for a limited period like six months or a year.
- If neither tenant nor landlord gives ’notice to quit’ at the end of that fixed period, the tenancy automatically becomes a ‘periodic tenancy’ which has no fixed end date.
- After a longer period of time, a tenancy can become a ‘statutory periodic tenancy’, which is the most secure and can only be ended by the landlord getting a possession order.
Renting in both names
If you decide to rent a property together, the rental agreement will recognise you both as equal tenants. This doesn’t mean you are each only responsible for half of the rent. If one of you leaves the property, for example, the other will be liable for the whole rent. Always make sure you have seen a copy of the rental agreement.
Renting in one person’s name
If the tenancy is only in one partner’s name, the other has no automatic right to remain in the property if the couple break up. You would have to negotiate with the landlord about the possibility of transferring the tenancy to another name, and your success will depend on how good a relationship you have with your landlord.
* Trust principles: Trusts are created to hold assets for the benefit of certain persons or entities. A written declaration of trust states the terms and conditions for the distribution of assets.
** Rules of intestacy: If a person dies without having made a will, this is called ‘dying intestate’. Intestacy rules dictate how the money, property or possessions should be distributed and who should inherit them.