Is buying a house with my daughter a good idea?

DOUBTS ABOUT BUYING A HOUSE WITH MY DAUGHTER

I live alone with my 25-year-old daughter. We currently live in the house my family grew up in but, as all my other children have left home and moved on, it’s too big for the two of us. I have been thinking for some time about selling it, buying a smaller house, and creating some extra capital. When I mentioned this to my daughter, she surprised me by suggesting we buy the new house together.

She has a secure, wellpaid job and this would mean I could free up even more capital to do the things I’d like to do in retirement. I am currently 62 and plan to stop working next year. It would also mean she gets a foot on the property ladder.

Money issues aside, I like the idea of having her around. We get on well together and I think it would work, providing we can give each other our own space in the new house. In truth, I am struggling to see a downside in all this so why do I still have doubts? L. G.

FIONA SAYS: BE CAUTIOUS

You’re right, there are many positives to this idea.

However, you’re also right to have some doubts because there are some potential pitfalls. Most of these are legal or financial and some are a bit morbid! You’ll need to have a detailed talk about ownership and wills, so I strongly advise you get legal advice from a competent conveyancing or property solicitor.

The first decisions you’ll likely need to make are who will own the house, and how?

This will probably be as Tenants in Common (your solicitor can explain this) but it also a good idea to draw up a Co-Living Agreement.

This is a formal document that sets out who owns the property and what should happen if certain circumstances change. Typically, this might include details of what happens to the house if someone dies.

Will it be sold immediately, and the deceased’s estate distributed as per the will? Or can the surviving owner stay in the property?

The document is also often used to clarify who pays for what and in what proportions.

It’s a complicated area and it’s important to agree these issues in advance and hopefully avoid any ill-feeling amongst family members. Also, what would happen if one of you starts a serious relationship?

None of these potential issues are insurmountable if you prepare adequately. Given that, I see no reason why you can’t make such an arrangement work.

It is important to seek legal advice before deciding.