Majority of new home purchases will be a joint effort as sole ownership becomes a luxury

14th July 2014

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More than three quarters of planned property purchases in the next two years will be a team effort as a result of rising home prices new research from Santander has found.

The lender found that 77% of planned property purchases over the period years will be made jointly, with two in five, or 39% of these transactions between friends, family members, and unmarried couples.

The study found an increasing trend for shared home purchases between two people who are not married, with 22% of those who are planning or considering a joint purchase in the next two years doing so with their unmarried partner.

In addition some 13% of those hoping to buy, will share the purchase with their parents, while 4% expect their home purchase to be made jointly with someone else such as a friend or other relative.

This contrasts with current figures, where just 7% of people own a home with an unmarried partner, 3% with their parents and 2% with a friend or other relative.

Worryingly Santander’s study highlights that almost half, at 44%, of existing joint home owners have no life insurance cover and a further 27% of those who are planning or considering joint home ownership have no plans to buy it.

The research also shows that of those planning a joint purchase, unmarried couples are almost twice as likely as married couples – 39% versus 21% to do so without life insurance.

The main reason for buying jointly, cited by 23%, was that shared ownership is the only way they can get a foot on the ladder. But only a fifth, at 21% of those planning a joint purchase will do so simply because they want to live with the other person and 16% will buy jointly because it will leave them less financially stretched.

Alan Mathewson, head of Santander insurance, said: “Sharing the purchase of a property, whether that’s with friends, family or a partner, is a great way to spread the financial burden of home ownership. Most people entering into a home purchase will be looking to keep costs down, but we’d urge people not to cut corners when it comes to life cover, as it provides a vital safety net for those around you.”

When asked how they would cover the remaining financial commitments in the event that the person they own a home with was unable to make them, only 38% said they would do so through their own financial means. A quarter say they would rely on the other person’s life insurance, 17% would be forced to sell the property and 9% would seek financial help from family and friends. Some 6% of respondents would risk repossession.

 

1 thought on “Majority of new home purchases will be a joint effort as sole ownership becomes a luxury”

  1. Noo 2 Economics says:

    “Worryingly Santander’s study highlights that almost half, at 44%, of
    existing joint home owners have no life insurance cover and a further
    27% of those who are planning or considering joint home ownership have
    no plans to buy it”

    Exactly why is this a worry? If you die the house is sold and mortgage repaid unless your lender has let you do something stupid like borrow 95%+ of the value, or is this an admission that another housing crash is on the way?

    It’s the lenders responsibility to protect their interest by requiring a whole life insurance policy be taken as a condition of the loan. The piece fails to point out that many pension plans contain a form of life assurance which any potential mortgagee should consider before taking out life insurance, as the insurance companies will fall over themselves in the rush for the exit door should the worst happen as they frantically shout that you covered yourself for an already insured risk so they won’t be paying!

    There is no reason to take out insurance (except to line the pockets of the insurance companies) unless you have dependants – this has not been made clear.

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