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Why Cohabitation Agreements are Invaluable for Cohabiting Couples

Why Cohabitation Agreements are Invaluable for Cohabiting Couples

Mortgage is the new marriage as couples rush to commit to each other with a house not a ring - with potentially dire consequences, new research has revealed.

More than a third of young couples thought buying a house together was a way of ‘showing they were committed’ to the relationship, whilst one in seven said they thought buying a house with their partner was ‘romantic’.
Many said they were ‘fed up’ with renting and 12 per cent said that buying a property was a way of getting some commitment from their other half.

Furthermore, one in five said they would be happy to buy a house with a partner they had only been involved with for a year or even less.
But despite this, nearly 90 per cent of those questioned said they hadn’t discussed who was entitled to what should the relationship break down.
The research, which surveyed 1,500 Brits, was commissioned by law firm Slater and Gordon after they had seen a spike in people asking about Cohabitation Agreements to protect their assets should a relationship break down.
Slater and Gordon Family Law Solicitor Amy Harris said, “Cohabitation agreements have been around for years but recently we have seen more couples coming to us and asking about how they work. But, to be honest, I am surprised there isn’t more.
“Anecdotally we all know people who have lost huge amounts of money after a relationship went wrong because a property was involved and, as this research shows, many couples now view buying a house as a way of making a romantic commitment, not a serious financial commitment.”
“It is more difficult than ever to get on the housing ladder and it makes sense that two salaries will put you in a better financial position with regards to what you can afford. But investing in a property together can leave you financially vulnerable if things do go wrong.

"Many of the couples that are coming to us have seen their friend’s hard-earned savings wiped out after buying a house with the wrong person. A break up is hard enough without losing your home and the tens of thousands of pounds you have spent on it.”
Despite the fact that cohabitation agreements seem to be on the rise, nearly two thirds of people surveyed had never heard of them and had no idea that they could protect the money they invested in to a property or how the equity of a property would be divided up if the relationship didn’t work out.
More than half of those asked said they would be willing to buy a house with someone who earns less than they do, with one in eight saying they would be happy to get a mortgage with someone even if they can’t contribute to the deposit.
However, if they contributed more towards the deposit, almost a fifth would expect to get more money back if they sold the house and one in seven said they would expect to own more of the house, neither of which is guaranteed for non-married couples.
Of those who owned a house with their partner and split up, a third said they feel they lost out financially, while the majority says it was harder than they thought it would be to divide assets and profit.
When asked if they would do things differently, more than a third of people who had bought property with a partner and separated said they definitely would as they were ‘naïve’, and 29 per cent said they wouldn’t buy with a partner again without a legal agreement in place.
A fifth said they had seen a friend lose out financially after a relationship broke down and said they had been put off buying property with their partner as a result.
Slater and Gordon Family Law Solicitor said, “No one wants to go into a relationship worrying about it failing but people need to be realistic. Often young people today will be borrowing money from parents and grandparents to afford to get on the property ladder and they should be thinking about getting a cohabitation agreement in place to protect that money if the relationship does end."

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Amy Harris is a Family Law & Divorce Solicitor at Slater and Gordon Lawyers in London.

Family Solicitors at Slater and Gordon offer expert legal advice, guidance and representation on all aspects of cohabitation. For a free initial consultation call freephone 0800 916 9055 or contact us online and we'll be happy to help.

Slater and Gordon Lawyers have offices in London, Manchester, Liverpool, Birmingham, Sheffield, Milton Keynes, Bristol, Cambridge, Cardiff, Edinburgh, Halifax, Newcastle, Wakefield and meeting rooms in Bramhall, Cheshire.