Tips for unmarried couples buying a property together

by Aaron Strutt

Sep 01 2014

We advise many of our unmarried buyers to plan for worst case scenario if they are purchasing a property together.

Even though most couples do not like the idea of discussing what would happen to their assets if they split up, a chat before completion of the purchase can potentially save a lot of hassle later down the line.

It's not just the buyers that need to be considered these days, parents are increasing looking to make sure the money they have put into the transaction is protected. They want to know they won’t lose out in the event of a separation and their money is kept in the family. 

In many cases it makes sense to work out what happens if one of you quits your job to look after any of the children or if one person puts in a bigger deposit.

A Declaration of Trust is often used when unequal contributions are put into the purchase and it will set out what would happen if the property is sold and ensure the return of a deposit. It also allows couples to agree how to split any increase in the equity if the value of the property rises. 

The Declaration of Trust will only be used to deal with the equitable interest (profit) although it spells out what happens in the event of sale. As the name suggests, it is a declaration based on trust although it is legally binding.

It costs approximately £250 to setup, although it is not as popular as it should be, particularly as many couples don’t think they will ever need to use it. It is also a difficult subject to discuss as it has the potential to cause arguments.