In recent years the hike in property prices means that taking that all-important first step on the property ladder is all the more difficult. Buying with someone else, known as co-buying, can offer a solution to this problem.

Co-buying is not without its own issues, but there are measures you can take to ensure it is as painless as possible.

Finding a mortgage mate

This could be your partner, best friend, relative or a stranger. There are plenty of websites that foster links between people who wish to buy with strangers. Either way, it is important to be frank about the type of property you are looking for, how long you wish to own it and your investment hopes for the future.

Deed of Trust

It does not matter whether you are buying with friends you have known for years or a family member, you should enter into a written agreement. You will need to ask your solicitor for a Deed of Trust, costing a couple of hundred pounds.

Signed at exchange of contracts, the purpose is twofold: Firstly, to set out in writing what percentage of the property you both own, how costs will be divided and what will happen if one of you decides to sell up. Secondly, it forces co-buyers to discuss all aspects of the purchase so that last-minute misunderstanding can be ironed out.

Another point of this document is to set out who will inherit your share of the property in the event of your death. If this is not covered in the Deed of Trust, you should create a will and include these details there.

Payment protection

Mortgage lenders do not care who pays what percentage of the mortgage. If you cannot pay one month, they will expect your co-buyers to cover your shortfall.

For this reason it is important that all parties sign up to mortgage payment protection insurance (MPPI) so that if you fall ill and are unable to work the policy will cover the mortgage payments.

What if I want to buy or sell a share in the property?

First of all, you need to get the property valued to find out the worth of the share. You then need to agree on a selling price with the joint owner/s.

If you have a joint mortgage, you will need to get your mortgage lender's permission to change the ownership of the home.

If you need to move a joint mortgage solely into your name, the lender will need to ensure you can afford repayments on your own. In turn, if you want to add a new owner to an existing mortgage, the mortgage company will run the usual checks on them.

If all is well, you will need to instruct your solicitor accordingly and amend the names on the title deeds.