Despite the housing minister’s calls last week, it is already perfectly possible to get a mortgage with friends. Lloyds Banking Group, which runs both the Halifax and C & G mortgage brands, said it allowed up to four friends to buy a home together, but only two people’s salaries would be taken into account when deciding how much they could borrow.
But given that the main stumbling block for many first-time buyers is the deposit, this can still be a useful way to get on the first rung of the housing ladder.
The vast majority of lenders (including Lloyds Banking Group) will lend only up to 90pc of a property’s value, with borrowers needing a deposit of between 20pc and 25pc to secure a competitive rate.
The average deposit is now more than £20,000. Combining savings with friends can be a more effective way to build such a pot.
Britannia, part of the Co-op, is one of the few lenders to offer a mortgage aimed at friends buying together. Again up to four people can borrow – but here all salaries are taken into account.
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