Is the parent an owner, a lender or a giver?
This is the first question, and the answer changes everything else.
If your parent gives you money towards the deposit and expects nothing back, it's a gift. They aren't an owner, and our guide to gifted deposits covers it.
If they lend it and want it back, that's a loan. It needs its own written agreement and your lender's knowledge, and a solicitor should handle it.
If they're buying a share of the home and will be on the title, they're a co-owner. That's when a declaration of trust between all of you is needed.
Joint borrower, sole proprietor mortgages
Some lenders let a parent go on the mortgage to help with affordability without going on the title. This is called a joint borrower, sole proprietor mortgage. The parent is responsible for the loan but owns none of the home. It can avoid the Stamp Duty surcharge described below. Ask a mortgage broker whether it suits you.
Stamp Duty
If a parent who already owns a home goes on the title, the whole purchase usually pays the 5% higher rates for additional homes. That can add thousands to the bill. First-time buyer relief is also lost, because it only applies when every buyer is a first-time buyer. Check the numbers on GOV.UK before deciding whose name goes on the deeds.
Siblings
Buying with a brother or sister is much like buying with a friend. Agree your shares, the bills, what happens if one of you meets a partner, and how a buyout works. Make wills too: if you die without one, your share goes to your own family under the intestacy rules, which may not be what you'd choose.
More than two owners
Up to four people can be named on the title. Our template is written for two owners. If three or more of you are buying, the shares and exit rules get more complicated, and paying for advice is worth it.
Sources
- GOV.UK: Stamp Duty Land Tax residential rates
- GOV.UK: Who can inherit if someone dies without a will