A legal warning is being issued to a fresh wave of first time property buyers that are looking to take advantage of five per cent deposits from April.
The Government recently announced that they will be guaranteeing 95 per cent mortgages of up to £600,000 with banks when they lend to first time buyers or existing homeowners.
This move, in turn, is set to spark a revival in home purchasing from first time buyers especially - and with it a greater deal of life-changing financial consequences for many individuals if they don’t do their own personal due diligence beforehand.
That’s the warning from Justin Creed, Family team Lawyer, who is urging unmarried couples who are moving in together to protect themselves individually in the event of their relationship ending.
He said: “Purchasing a house is akin to investing in an asset that you eventually hope to sell for a profit, but if only one partner’s name is on the deeds this leaves the other partner without any legal right to benefit from the proceeds of the property’s sale - or to even live there.
“There are similar obstacles when a couple is renting a property. If only one partner’s name is on the tenancy then this leaves the other partner with no legal right to live there should things go wrong.”
This scenario came to the fore on one of the UK’s most famous TV soaps, Coronation Street, recently, where fictional character Fiz Stape - unaware that her boyfriend Tyrone Dobbs was cheating on her - realised how little financial protection both herself and her boyfriend had as individuals despite living in their own property together and having two children. She eventually settled on marriage as the solution.
Justin added: “A common belief is that marriage resolves individual rights over a property, however, if only one person’s name is on the deeds it is not a foregone conclusion that the married spouse will automatically be entitled to an equal share of the marital home.
“That is why it is prudent for married and unmarried couples to explore alternative legal arrangements other than marriage to ensure that their share of the property that they are living in is protected.
“At the time of a property purchase couples should agree who owns what share of the property. They could do so in a declaration of trust or cohabitation agreement - that way each person in the relationship will have a legally-binding agreement in writing for complete peace of mind that there won’t be any nasty financial surprises in the event of any break up.”