"All I want for Christmas … is to move in together, buy a house and get on with our lives," is what I hear many of my friends saying at this time of year. However, the economy has left a lot of couples in two minds about taking the financial leap of buying property together, as interest rates remain sky high for first time buyers.
Couples may love each other deeply, but when it comes to the capital they've built up steadily over the course of their working lives, they guard it closely. There is therefore considerable apprehension about moving in with their partners and they are mindful of the financial consequences of any future separation – especially if they have been down that road in the past… once bitten and twice shy…
Where couples move into rented accommodation together, they should be conscious of their contractual obligations. If one of them is named on the lease and the other is not, only the named person can be pursued by the Landlord for non payment of rent and for any damage caused by their beloved, whether this was unintentional or otherwise.
If you are fortunate enough to buy a property with your partner this Christmas, then firstly – congratulations! Secondly… I hope you entered into a cohabitation agreement prior to doing so. Cynical I know. Where only one person is named on the title deeds to a property, their (non married) partner has no automatic title to live there, nor to share in the value of the property. However, occupancy rights can be applied for via the court. Cohabitants also have the right to make financial claims against each other, provided any such claims are made within one year of separation (or six months of their cohabitant's death).
Where parties are married or in a civil partnership and have brought unequal funds into the purchase of the family home, they may be able to have this discrepancy taken into account when considering their finances on divorce (should the worst ever come to fruition). As such, and this is not very Christmassy at all… consideration should be given to a pre or post nuptial agreement.
Gifting and loans
Now, parents … I know you wish the best for your children, but if you are gifting them a sum towards the deposit for their first home, please put the terms of this gift in writing and specify exactly to whom this gift is being made (eg your daughter and her partner OR just your daughter). If the sum of money is instead a loan, you would be wise to enter into a loan agreement in writing. It may come back to sting you and/or your children in years to come if you do not do so.