 Buying
A Holiday Home With Friends – the Ups and the
Downs. EB July 2007
You may have set your heart on
buying a holiday home but then found
that financially it is beyond your reach. If you
are in this position, it might be worth asking
round your friends to see if any of them are in
the same situation. If so, perhaps they might be
interested in buying with you.
This could certainly be a solution to your
problem. However,
buying a holiday home with friends is a
big step to take. You should consider the pros
and cons carefully before taking the plunge.
Benefits
• Shared deposit. When you are buying a
holiday home, you will almost certainly find
that the deposit required is larger than it
would be on a first home. Splitting it means
it’s much easier to find your share.
• Shared additional costs. Buying a holiday home
involves many extra costs on top of the purchase
price, including legal costs, stamp duty, survey
fees and several types of insurance. All of
these can be shared.
• More funds available. You may find you can
consider a bigger property, or one in a nicer
area, than you would otherwise have been able to
afford, as between you you can manage bigger
payments. Yet your individual share of the
payments may well be less than if you were going
it alone.
Possible pitfalls
• Additional legal costs. When
buying a holiday home with another party,
it is essential to have a watertight legal
agreement drawn up, however friendly with them
you are. Obviously this will incur extra costs.
• Disagreements. When buying a holiday home with
a friend you will probably be very excited and
feel sure nothing can go wrong. However, anyone
who has done this will tell you that
disagreements will always arise. For instance,
you may both want to use the property with your
own friends or family at the same time. Or one
party may want to sell out.
• Repairs. Buying a holiday home is for the long
haul, and things will sometimes go wrong. When
there is a need for a major repair, such as a
new boiler, roof repairs, etc., you need to be
very sure how this is going to be shared.
Supposing your friend refuses to pay, saying
he/she can’t afford it? Or supposing the problem
happens while you are occupying the property and
your friend says you are responsible? Working
out finances will always be complicated and the
legal agreement needs to include as many of
these details as possible.
The important thing when buying a holiday home
with a friend is to be realistic and anticipate
problems in advance, rather than being
starry-eyed and pretending everything will be
perfect. If you plan carefully, you have every
chance of a happy arrangement that will give you
both lots of pleasure.
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