Despite recent increases in interest rates, house prices in the Bedfordshire area continue to rise which makes it more difficult for those wanting to get their foot on the first rung of the property ladder. Many young people have solved this problem by teaming up and buying a property jointly. This splits the cost, but care is needed, as there are two ways that multiple buyers can own property and they have different long-term implications.

If two people own a house or flat as ‘joint tenants’ and if one dies then the other automatically becomes the sole owner of the home without any need to refer to a Will. This may be appropriate for couples, but unsuitable for friends.

On the other hand, a jointly-owned property can be held as ‘tenants in common’. In this instance if one dies, their share passes through their estate. It is therefore critical that a Will is properly drawn which sets out clearly to whom that interest passes on the demise of the joint owner.

First time buyers may not have sufficient savings for a deposit, but mortgage companies can help by offering a 100% mortgage. It is customary for a purchaser to pay a deposit of 5% or 10% of the purchase price on exchanging contracts, so if there is no deposit, then another alternative will be needed. Years ago purchasers would approach a bank for a bridging loan until completionexchange, but banks are very loathe to give bridging loans in these circumstances.

Another option is to exchange and complete on the same day to avoid the need for deposits, but in this situation there is nothing stopping either party pulling out of the transaction even on the morning before completion. This can be catastrophic for everybody else if it is a link in a chain of transactions.

It is possible to exchange without a deposit, and while this may solve one problem it can raise another. If the first time buyer does not proceed after exchange, the seller can be liable for costs from other people in the chain. Without a deposit, the seller is unlikely to recoup those costs from the ‘guilty’ party.

The moral of this tale is that while we all hope that buying a property proceeds smoothly, there are many pitfalls which can turn delight to disaster, so always take professional advice.

July is still the projected date for the launch of Home Information Packs (‘HIPS’) even though recent trials have met with mixed success. HIPS will involve all estate agents and solicitors, and as with the introduction of any new scheme, it will take time to smooth out any wrinkles. We will keep you updated, but should you need information about HIPs, you only have to ask.

If you need any further advice on conveyancing or HIPs contact Debbie Matthews or Stephen Frith at Motley & Hope. Telephone Debbie or Stephen on 01767 600600 or e-mail debbiematthews@motleyandhope.co.uk or stephenfrith@motleyandhope.co.uk.