Why the deposit can disappear
When two people buy in joint names without a written agreement about shares, the courts start by assuming they meant to own the home equally. The Supreme Court confirmed this in Stack v Dowden (2007) and Jones v Kernott (2011). You can try to prove you agreed something else, but that means evidence, lawyers and often a court hearing. Couples who split up without a declaration of trust regularly spend more on the argument than the difference was worth.
A signed declaration of trust settles it. Courts generally hold owners to what they signed unless there was fraud or a genuine mistake.
Three ways to split it
1. Deposits back first, then share the rest
Each of you gets back what you put in, and anything left is split equally. This is the most common choice for couples with different deposits. It protects the bigger deposit without giving that person a bigger slice of any growth.
2. Fixed percentages
For example 80/20, often based on what each of you put in. The bigger contributor shares in any growth, and in any loss, at that percentage.
3. Equal shares
50/50 regardless of who paid what. Some couples choose this deliberately, for example when one pays the deposit and the other will pay more of the mortgage.
What each choice means in money
Sam and Alex buy for £300,000. Sam puts in £60,000, Alex puts in £15,000, and the mortgage is £225,000. These figures leave out selling costs and any mortgage paid off since.
| They sell for | Left after the mortgage | Deposits back first | Fixed 80/20 | Equal |
|---|---|---|---|---|
| £360,000 | £135,000 | Sam £90,000, Alex £45,000 | Sam £108,000, Alex £27,000 | £67,500 each |
| £280,000 | £55,000 | Sam £44,000, Alex £11,000 | Sam £44,000, Alex £11,000 | £27,500 each |
| £210,000 | £15,000 short | They pay the shortfall: £7,500 each, or 80/20 if fixed | £7,500 each | |
When the sale doesn't even cover both deposits, "deposits back first" shares what's left in proportion to the deposits. Neither person gets everything back, but the bigger contributor loses less.
Other things to agree at the same time
Decide what happens if one of you pays more than half the mortgage. Either it changes nothing and counts as a choice, or the extra comes back when you sell. Both are fine. Leaving it unsaid is what causes arguments.
If one of you paid the Stamp Duty or the conveyancer, you can add that to their contribution so it comes back first as well.
Money from parents needs one line of its own (our guide to gifted deposits goes into more detail). Record that it was a gift to that person. If it's actually a loan your parents expect back, a template won't cover it and you should take advice.
Finally, agree how much notice either of you gives to sell, and whether the one staying can buy the other out at market value.
When to sign it
Ideally before or on the day you complete, so it's in place from the start (see signing before completion). Tell your conveyancer you're buying as tenants in common. You can also make one after you've bought, as long as you both still agree.