by Claire Ward, a family lawyer at Langleys Solicitors

Following news of the government’s new scheme, which allows borrowers to purchase a house with only a 5% deposit, Claire Ward, a senior Family Law expert at Langleys Solicitors, says, “Couples must consider a sensible approach to shared ownership and have written agreements in place to avoid lengthy and costly property disputes in the future.”

Claire commented: “While the new scheme will allow many young couples and first time buyers to purchase a house at a reduced upfront cost, this could also bring unexpected and drastic consequences to those who fail to protect their share of the investment if separation was to happen in the future.

“The scheme adds an urgency for couples to purchase a home together with no thought for their current relationship and financial status. For example, if two people were to purchase a home together putting in different levels of investment, but without a record of their individual contributions, one party may find themselves out of pocket if the relationship was to sour and the home was sold in future.

“To avoid this young couples and first time buyers should look into reaching a legally recognised agreement and importantly seek separate legal advice over how best to protect their own assets. Choosing to enter a legally binding agreement means that each person’s stake in the shares of the property is fairly recognised and that they have agreed in a way that gives each person a way out while being sure of their own protection. There are two agreements that prospective unmarried homeowners can enter into in order to protect their assets: a Declaration of Trust or a Cohabitation Agreement.

“Signing a Declaration of Trust or a cohabitation agreement while purchasing a property allows a couple to set out the arrangements between them over where they stand if the property is sold or either party wants to be bought out in the future.”