Joint tenancy explained

What is joint tenancy?

Joint tenancy is a type of ownership where two or more people are equal owners of a property.

When you enter into a joint tenancy mortgage, all tenants have equal rights to the property and each tenant owns the whole property. This means that if one wants to sell, the others must agree.

What’s more, if one of the tenants were to die, their share of the property would pass to the remaining tenant or tenants. You cannot leave your share of the property to someone else in your Will.

All owners will be responsible for keeping up with the mortgage repayments, so if one tenant can’t pay, the remaining tenants must cover the shortfall.

Who is joint tenancy suitable for?

Joint tenancy is ideal for married couples or couples who intend to get married. A joint tenancy mortgage could also be suitable for siblings or family members who want to make a joint investment.

What happens when joint tenants split up?

When joint tenants split up and one party moves out of the property, they are still both responsible for the mortgage repayments.

There are a couple of options to help the joint tenants make a clean financial break from one another. The simplest is to sell the property, pay off the joint tenant mortgage and split the proceeds equally.

The second is to change from joint tenants to tenants in common. This means that rather than both tenants owning all of the property, they each own a share. The shares do not have to be equal.

What is the difference between joint tenancy and tenants in common?

The main difference between joint tenancy and tenants in common relates to the nature in which the property is owned by the tenants, and what happens if one of the tenants dies.

Joint tenants own a property in equal measure. If one of the tenants were to die, their share of the property automatically passes to the remaining tenant or tenants. If joint tenants want to sell the property, all tenants must agree.

Tenants in common is different, as each tenant owns a share in the property and there is no legal requirement for the share to be equal. If one of the tenants in common were to die, their share of the property would pass to whoever they have chosen as a beneficiary (as outlined in their Will).

For a deeper exploration, read our guide covering joint tenancies vs. tenants in common arrangements

Is it better to be joint tenants or tenants in common?

The choice between being joint tenants or tenants in common when owning property in the UK depends on individual circumstances and preferences.

Advantages of joint tenancy

• Right of survivorship: If one owner dies, their share automatically transfers to the surviving owner without the need for probate, ensuring a seamless transfer of ownership

• Equal ownership: Joint tenants have an equal share in the property, providing simplicity and clarity in terms of ownership proportions

• Simplicity in sale: Selling the property is straightforward because all owners must agree to the sale, eliminating potential disputes or complications

Advantages of tenants in common

• Flexibility in ownership: Each owner can hold a distinct share in the property, allowing for different ownership proportions based on individual contributions or preferences

• Inheritance planning: Each owner can leave their share of the property to their chosen beneficiaries in a will, ensuring control over who inherits their portion

• Financial independence: Owners can freely mortgage or sell their individual share without requiring the consent of other co-owners, providing flexibility in managing their investment

The decision should be based on personal circumstances, such as relationships, inheritance plans, and financial goals. It is advisable to seek legal advice to determine the most suitable option for your situation.

What is ‘severance of joint tenancy’?

It is possible to change ownership from a joint tenancy to a tenants in common. You can do this without the other owners’ agreement.

To do this you need to serve a written notice of change, or a ‘notice of severance’, and make an application to the HM Land Registry. You need to apply for a ‘Form A restriction’ or you can make the application through a solicitor. Find all the information you need on the government’s website.

Things to consider before entering a joint tenancy

Taking out a joint tenancy mortgage with someone is a big commitment. Here are six things to consider before you start.

• Trust. Evaluate the level of trust and compatibility with your co-borrower. Be comfortable your goals are aligned

• Financial responsibility: Assess each borrower's financial situation, including credit history, income stability, and debt obligations

• Legal agreement: Consider creating a legally binding agreement outlining each party's responsibilities and financial contributions

• Future plans: Discuss long-term plans, such as potential changes in employment, relocation, or starting a family

• Affordability. Calculate the affordability of the mortgage payments, factoring in both your incomes and potential changes in financial circumstances

• Exit strategy: Plan for the possibility of one or more borrowers wanting to exit the mortgage, including options for selling the property or buying out the exiting party's share

Does marriage override joint tenancy?

Joint tenancy remains intact regardless of marital status, but marriage can have implications on joint tenancy in terms of inheritance and divorce.

In the event of death, marriage may impact the distribution of assets. During divorce proceedings, the court considers the joint tenancy when determining the division of property. 

It is advisable to seek legal advice to fully understand the impact of marriage on joint tenancy in the UK and to ensure proper estate planning and protection of interests.

Does a joint mortgage have to be 50/50?

A joint mortgage does not have to be split 50/50 between borrowers. The ownership share can be divided based on individual contributions, financial circumstances, or any agreed-upon arrangement.

It is common for joint mortgages to have equal shares, but the specific distribution can be customised to suit the needs and agreements of the borrowers. 

Lenders typically assess the combined income and creditworthiness of all applicants to determine the maximum mortgage amount, and the ownership share can be adjusted accordingly. 

It is crucial for borrowers to discuss and agree upon the ownership split before entering into a joint mortgage, ensuring clarity and fairness for all parties involved.

Can we get a joint mortgage if only one of us works?

It is possible to get a joint mortgage in the UK even if only one person in the partnership works. Lenders typically consider the combined income and affordability of both applicants when assessing mortgage applications. 

While having dual incomes can strengthen the mortgage application, lenders also consider factors such as the employed individual's income stability, creditworthiness, and the overall affordability of the mortgage repayments. 

It's important to note that the lender's decision will depend on various factors, including the overall financial situation. Seeking advice from a mortgage advisor or speaking directly with lenders will provide more accurate information based on your specific circumstances.

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Your home may be repossessed if you do not keep up repayments on your mortgage