14th July 2014
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.