Buying a house when you aren’t married.

Rachel Macwilliam, a Family Law specialist at Penderlaw Solicitors, discusses the potential pitfalls for unmarried couples buying a property together and has some advice on how to avoid financial disaster should the relationship fail.

More and more couples are choosing to live together rather than get married according to government figures. In 2021 just over 24% of couples living together were not married. As well as social changes, spiralling house prices and now the cost-of-living crisis, have resulted in more and more couples choosing to prioritise spending their money on other things such as getting onto the property ladder and keeping up with the bills, rather than a fancy wedding with all the expense and stress that goes with it.

With fewer Millennials now getting married than in previous generations, another trend has emerged which has begun to coin its own phrase – ‘The Millennial Divorce’, describing the increasingly common situation where couples who own property together but aren’t married, split up.

Buying a house together is such an exciting step in itself, and quite an achievement in this day and age, so thinking of what would happen should things not work out is the last thing you’ll want to do, but absolutely the very thing you need to do to.

Whilst the government has considered changes to the law in this area, the current law protects divorcing couples from unfair division of their assets, but cohabiting couples have no such protection. There is no such thing as ‘common law marriage’, it is a complete myth.

So, what can you do to avoid unnecessary financial trauma should things not work out for you as a couple?

Talk about finances
Be clear about who is going to pay for what so that resentment doesn’t creep in should one of you feel that you are contributing more than the other. A joint account can protect the money you need to pay the mortgage and bills and make it easier to budget, but be aware that a joint account links you to the other person financially, and can affect your credit score.

Face the unpalatable
What happens if you break up? Not perhaps a conversation you want to focus on when you are making a commitment as big as buying a house together but nevertheless, an important one. One way to formalise the crucial elements of what happens should you break up is a ‘Cohabitation Agreement’. It is legally binding document and covers everything from what share of the property each of you owns (particularly important if one person has contributed more to the deposit), to what happens if a dispute occurs, maintenance costs and who is financially responsible for what. Rather like making a Will, it ensures that what you want to happen will happen and enables you to then move on with peace of mind knowing you have dealt with the issues which could potentially arise. Having said that, it will need to be updated, again just like a Will, should your circumstances change.

Make a Will
Speaking of which, now that you are going to share a significant asset i.e., a property, you should make a Will. You may feel you are too young to bother with such things, but no one knows what the future holds. When a spouse or civil partner dies without a will, the majority of assets automatically pass to the surviving spouse or civil partner, which includes your property, as well as your pension and any savings. But, and this is a big but, if you are not married, you do not have the same rights and other rules kick in which may mean that your partner does not inherit your half of the property.

Get in touch

If you’d like to find out more about Cohabitation Agreements, Wills or any other topics connected with this article, we would be glad to hear from you. You can reach us by emailing info@penderlaw.co.uk  or you can call us on 01872 241408.