Is it possible to buy a home on your own?

Spiralling property costs have resulted in an increasing number of mortgages being taken out in joint names, new statistics have revealed.

Data from Halifax shows almost two thirds (63%) of mortgage completions were in joint names in 2022, up from 59% in 2021, as more people attempt to share the huge financial burden that comes with getting on the property ladder.

Here, Which? delves into whether buying alone is still an option, and looks at the pros and cons of having more than one name on the property deeds.

Joint mortgages gain popularity

A joint mortgage is when two or more people – for example, a partner, friend or family member – buy a property together, taking out a loan in both names. They are then jointly responsible for making repayments.

Rising interest rates, record house prices and the cost of living crisis have made it tough for sole-purchasers, sparking an uptake in first-time buyers taking out joint mortgages in 2022. But Halifax figures reveal the trend has been growing for years.

The graph below shows how joint mortgage uptake has increased year-on-year since 2014. The last time sole first-time buyer mortgages were in the majority (52%) was back in 2016.

Record deposits pricing out single homebuyers

Getting a big enough deposit for a house purchase is a trouble millions are continuing to face. 

The average sum put down in the UK in 2022 was £62,470, according to figures from Halifax – but this varies across regions in the UK, as shown in the table below.

The average deposit – now at a record high – is up 8% compared with 2021, and property values for first-time buyers are now around 7.6 times the average UK salary. 

It means the majority of first-time buyers have been priced out of the market if they want to buy solo. But despite the hefty sums, first-time buyers now account for over half (52%) of all loans on homes, as the use of joint mortgages continues to grow.

Of course, the amount you put down will vary depending on the value of the property you're buying, and what loan to value (LTV) mortgage you choose. Taking out a 95% mortgage, for example, will mean you pay a much smaller upfront sum than an 85% LTV.

Our LTV calculator can help you find out the LTV percentage you'll need for your mortgage, based on the property value or deposit you have.

Can I afford to buy a house alone?

Lenders usually allow you to borrow a maximum of 4.5 times your annual income. So, if you earn £33,000 a year – the median annual pay for full-time employees in 2021-22 according to the Office for National Statistics (ONS) – and are buying alone, you might be able to borrow up to £148,500. 

With that borrowing potential in mind, if you had the amount needed for an average UK deposit (£62,000), you could potentially look for houses around the £200,000 to £210,000 price mark. According to the UK house price index, the average house price in October 2022 was £296,000, so – even with a large deposit – it's likely you may still find yourself priced out of a lot of properties.

So, to get on the property ladder alone, you'd either earn a higher-than-average salary, save a larger-than-average deposit, or buy a cheaper-than-average property.

• Find out more: what's happening to house prices?

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How joint mortgages can help you afford a house 

Pooling your deposits and incomes with someone else can drastically improve your chances of securing a larger mortgage, as lenders will consider the combined incomes of two applicants when assessing how much you can borrow.

If you both earn £33,000 a year, you could be offered a mortgage for 4.5 times your combined annual income, which would come to £297,000 – equalling the average house price.

Joint mortgages are usually shared by two people, but some lenders will allow up to four borrowers to share the loan repayments.

If there are more than two people on a mortgage, lenders will normally only take the income of the two highest-earning people into account when deciding how much to lend. 

Grouping your finances can also help you to put down a larger deposit, meaning you can likely get a mortgage with lower interest rates.

• Find out more: joint tenants vs tenants in common

How to split up a joint mortgage

Divorces are the main cause when splitting a joint mortgage, with separating partners wanting to cut financial ties with each other. 

While the number of joint mortgages are on the rise, break-ups are also forecast to increase this year following the introduction of no-fault divorces in 2022. So, whatever the reason for the ripping up of a joint mortgage deal, it pays to know your options should you wish to get out of one.

• Sell your home: you can use the proceeds of the sale to pay off the mortgage, although you may incur an early repayment charge, depending on the terms of your mortgage.
• Transfer equity: this is the legal process of transferring the ownership of a jointly owned property to a single owner. It often involves one owner 'buying out' the other's share.
• Continue paying the mortgage until it's cleared: sometimes, perhaps if a couple splits up but one person stays living in the property with the children, both parties continue paying the mortgage until the debt is cleared.

How to save for a deposit on your own

Buying a house with someone else isn't an option for everyone. Saving in the middle of a cost of living crisis is a very tough task, but we have lots of advice to help you boost your deposit.

If you're in the earlier stages of saving, consider the pros and cons of opening a lifetime Isa, which offers a 25% government bonus on your savings, and work out how much you need to save for a deposit.

If you're a little further down the line, we can help you find the best mortgage deals and ultimately apply for a mortgage.