Everything You Need to Know About Group Mortgages

The cost of the average UK home has now reached almost Ł180,000 - nearly six times the UK average income.

It has become increasingly difficult for first-time buyers to buy a property - even with two incomes, many areas of the country are unaffordable for most first-time buyers.

A recent survey has shown that around 57% of first-time buyers would consider buying a property with friends. Over the last few years more and more high street lenders have started to offer just such mortgages; group mortgages that enable up to four people to pool their income and jointly purchase a property.

What's A Group Mortgage?

A group mortgage is a mortgage held by 2-4 people, with the amount lent being based on the incomes' of all those people.

The property being purchased is also jointly owned by all the people on the mortgage - so four friends might buy a house, based on all four of their incomes, and 25%-owned by each of them.

Group mortgages have been around for a few years now, but over the last couple of years have experienced a surge in popularity as house prices have continued to rise, pricing many first-time buyers out of the market.

One major high street bank has reported a 50% rise in applications for group mortgages this year, and with the average house price in the UK approaching six times the average income this trend looks set to continue, especially in the south-east and in major cities.

Why Choose a Group Mortgage

Group mortgages offer a solution to first-time buyers who cannot afford to buy a property singly.

Either they do not have access to a suitable deposit, or more likely, the mortgage required is too large to be based on their salary alone.

The problem with renting is that you aren't left with anything when you move out. It's money down the drain.

As the monthly payments for a rental property are sometimes more than those for a mortgage, it can be very difficult to save up for a deposit when you are renting. Group mortgages can provide a solution to these problems.

How Do Group Mortgages Work?

Taking out a group mortgage is very similar to taking out a regular mortgage, except there is an extra stage required to agree the terms of the joint ownership.

Each person whose income is being used to fund the mortgage will be required to provide proof of earnings and undergo a credit check, just like a regular mortgage.

If you want to get your best mortgage quote quickly and easily we offer a great new service. We can put you in contact with a professional mortgage adviser. It's free and completely confidential. Simply fill out the form below

Important note about your credit rating

Many websites don't make it clear that filling in their mortgage enquiry form means you might be credit checked.

This can put you at risk.

UK Mortgage lenders may assume an enquiry you have aleady made to another lender means you were turned down - and not that you are in fact carefully shopping around and rejecting the bad deals.

The best way around this significant problem is to ask an independent mortgage adviser to make anonymous enquiries for you.

Without risking your credit score an adviser can find you the best available mortgage deal. They will also know how likely you are to be accepted by the lender if you decide to make a formal application.

If you would like a recommended adviser to check out the best deals for you, anonymously, simply fill in the quick form below.

" Hmm..." You might think; "Won't I be hounded by a salesman hungry for my business? "

This is the most common question we hear from our users.

The answer is no you won't.

Firstly your enquiry is only passed to ONE person on a carefully vetted list of independent advisers.

Secondly, these mortgage advisers are professionals. Even when the market is slow they are busy people. There many people who need to move homes, or get a remortgage and are looking for advice all the time. Regardless of the state of the property market, life goes on.

So the advisers don't have time to hassle people. It just doesn't work like that. No one is gong to be forced into taking out a mortgage unless they really need one.

The advisers are very used to talking with people, perhaps like yourself, who are only "dipping their toes" into the water.

Many people just want an initial quick chat and if they feel comfortable will ask the advisor to contact them again later - often in several weeks or months. As a professional, the adviser will simply diarise this and call back at the appropriate time. There is no obligation at all.

(In the unlikely event that you ever feel at all "hassled" by someone on our list please let us know immediately. We have never heard of this. But if it happened we would definitely want to know).

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