The pros and cons of buying with siblings
First Time Buyers' Guide You may have shared a room as children and now, as adults, you are thinking of buying your first home together but is it necessarily a good idea?
Buying a home with a brother or sister can be a good idea, allowing you to pool resources and get onto the property ladder with someone you know really well. Unlike with friends buying together - when unforeseen personality traits can lead to bitter fall-outs ‑ with a sibling, you generally know what you are getting into.
It worked well for one Dublin brother and sister who bought a three-bedroom house when they were in their 20s, which they lived in and also made rental income from.
Life has moved on in the intervening 20 years and she is now married while he works in London but has a Dublin base to come back to when business and pleasure brings him here. They may eventually sell, because this arrangement won't work indefinitely, but the house has accumulated in value and they still get on.
Yet the arrangement can also be fraught with problems, says Dorothy Ware of Donal Reilly & Collins solicitors in Dublin, and it's worth considering these at the outset and drawing up a sort of sibling pre-nup called a Co-ownership agreement.
"It can be difficult if they take on a mortgage together," she says, "and one of them meets someone else." The consequences of this, she says, is that the lover may move into the property, the new couple may want to buy the home outright or one of the siblings will want to sell the home for another reason.
Yet the alternative - in which neither sibling falls in love and moves off to a life of coupledom - leaving the siblings living together in financial bliss for the rest of their lives is probably not the stuff of dreams for many.
This is why it can help if the siblings see a shared step into home-owning as an investment, knowing that they will eventually move on, says Ware.
The Co-ownership agreement looks into a future of love, careers, emigration and other scenarios that make up lives-lived, and sets out what would happen in such cases. In the case of a loan "the bank will always take priority", says Ware, "owning up to 90 per cent of the property." Aside from that the agreement would then consider what would happen if one or both owners wanted to sell, for instance, would they accept a valuation from an auctioneer and what would happen in the case of negative equity?
"The worst scenario," says Ware, "would be going to court". This would be the case if one wants to sell and the other doesn't, and there is no Co-ownership agreement.
Inheritance is an issue too: while couples buying together usually have a Joint Tenancy - meaning that if one dies the other inherits the property; siblings buying together will usually be Tenants in Common, each owning a percentage of the property. If one dies their percentage goes to beneficiaries, while the surviving sibling keeps their percentage of the property (and all of it if their sibling leaves it to them). This can also create problems, as the surviving sibling could find themselves owning a property with someone new, who may want to move in or sell their share!
Siblings buying together is not that common, says Ware, probably because people don't want to be locked in to such a joint liability. But it can work well as a way of storing up equity for the future and having rental income, as well as a roof over your head without paying rent.