Joint Tenants or Tenants in Common?

With high property prices and complex family structures, home ownership isn’t always as straightforward as it used to be. Gone are the days when the typical property purchase was a single buyer or a married couple. Nowadays, people buy homes in all sorts of circumstances – cohabiting couples, blending families, friends pooling resources to get on the property ladder, business partners investing together, or even parents and children teaming up.

With such a variety of buying arrangements, one key decision often gets overlooked: how you’ll officially share ownership of the property. When the moment comes you’ll tick a single box to say whether you’ll be Joint Tenants or Tenants in Common. As simple as it appears, this choice isn’t just a technicality—it affects your rights, responsibilities, and what happens to the property in the future. Understanding the options and their implications is essential to make sure everyone’s interests are protected.

What’s the Difference Between Joint Tenancy and Tenancy in Common?

There are two main ways to hold the legal title when buying a property with others:

Option 1 – Joint Tenancy / Joint Tenants
Under a joint tenancy, both (or all) owners hold equal ownership of the entire property. This option is common for couples and may feel straightforward because:

• Simplicity: If one owner passes away, the property automatically transfers to the surviving owner(s), bypassing a Will
• Convenience: There’s no need to go through a legal process of specifying ownership shares
• Responsibility: Having been assessed together, both parties are jointly responsible for the repayment of the mortgage and all other obligations

However, joint tenancy might not always suit your situation, particularly if:

• You contribute unequally to the property purchase or mortgage.
• You want control over who inherits your share in case of death.

Option 2 – Tenancy in Common
With a Tenancy in Common, each owner holds a distinct share of the property, which can reflect unequal contributions to both the deposit and ongoing payments (whether 95:5, 70:30 or even 50:50). Key features include:

• Flexibility: Your share can be passed on according to your Will.
• Protection for Unique Situations: Ideal for buyers with significantly different deposits or incomes, or those with children from previous relationships.

There are no set rules on how you choose to split ownership if using tenancy in common – it’s something for you to agree on between you – although it can be valuable to seek advice from a solicitor or accountant.

When to Choose Tenancy in Common

Tenancy in Common is often seen in scenarios such as:

• Unequal Financial Contributions:  If one person provides a significantly larger deposit, they may want to ensure their greater contribution is acknowledged and protected in the event of a sale or separation.
• Blended Families: Ensuring children from previous relationships inherit your share.
• Business Partners: Keeping ownership separate in case of unforeseen changes.
• Inheritance Tax Planning: Maximising financial arrangements.

If you opt for a Tenancy in Common, it’s crucial to document your agreement in a Declaration / Deed of Trust. Your solicitor can support you with this legal document, and advice what to include. Typically it outlines:

• Ownership shares (e.g., 50:50, 70:30 etc)
• How ongoing contributions like mortgage payments or bills will be accounted for.
• Plans for unexpected situations like negative equity.

Impact on Your Mortgage Application of Choosing Joint Tenants or Tenancy in Common

• The ownership method is not something that affects your mortgage suitability or eligibility – as advisers, we do not need to know about it.
• Working out which method is most appropriate for you is something that your solicitor can often help with, and it is they who need to record this process.
• Be sure you ask them to draw up a Declaration of Trust in good time, prior to exchange of contracts.

Don’t Forget to Protect Your Investment

Owning property jointly is just the first step; protecting your financial interests requires careful planning beyond the purchase. Life evolves, and taking additional legal measures can help safeguard your investment and avoid future disputes:

• Making a Will: For tenants in common, a Will is essential to ensure your share of the property is distributed according to your wishes rather than defaulting to intestacy laws. Without one, your share might not go to the people you intend, such as your children or other loved ones.
• Pre-Nuptial or Cohabitation Agreements: If you’re buying a property before marriage or as cohabiting partners, these agreements can clarify financial arrangements. For example, they can outline who owns what share, how contributions to the mortgage or maintenance are handled, and what happens if the relationship ends.
• Post-Nuptial Agreements: Couples who marry after purchasing a property may find a post-nuptial agreement helpful to protect their individual or joint assets. This is particularly relevant if one partner has children from a previous relationship, is likely to receive a significant inheritance, or owns a business.
• Declaration of Trust: This document details each party’s contributions to the property and how the proceeds will be divided if the property is sold. It’s especially useful for tenants in common or for cases where contributions are unequal. We also frequently find that for those gifting money as a deposit, a declaration of trust is a useful tool to ensure that if there is a future dispute, their gift is protected.

These legal steps aren’t just administrative; they can bring peace of mind by clearly defining responsibilities and rights. They ensure that if circumstances change—such as a relationship ending, the birth of a child, or financial hardship—there’s already a plan in place to address them. Investing in these measures now can save significant time, stress, and expense in the future. The solicitors we work with can help you with all of these.