Buying a home together has become increasingly popular for unmarried couples, as more people have found themselves priced out of the property market if they were to buy alone. However, it’s important to consider the legal aspects of the purchase before you sign up to what could be a 25-year financial commitment.

For example, when you buy a property, you should decide whether to register with the Land Registry as ‘joint tenants’ or as ‘tenants in common’. What’s the difference? Well, joint tenants own the property equally, meaning both parties are entitled to 50-50 split should the property get sold in the future, even if one partner paid the deposit or contributed more to the mortgage. On the other hand, declaring yourselves as tenants in common lets you legally state how much of the property each party ‘owns’, and any profits made on the sale of the property can be divided based on the percentage.

The other important aspect of being joint tenants is that if one partner passes away, the surviving partner would automatically get their share of the property. However, under the tenants in common rules, if one partner were to pass away, their share in the property will pass to whoever they named as the inheritor in their will.

So, if the two of you are planning to buy a home together, but are contributing different amounts to the deposit and the mortgage, you should understand the differences between joint tenants and tenant in common, and make your feelings known regarding what you would want to happen to the property. You might want to consider arranging a ‘Declaration of Trust’, a legally binding document, which sets out your financial arrangements and any intentions agreed between joint property owners at the time of purchase.

Once you’ve decided to move in together, one of the next steps could be to open a joint bank account. This is a current account where two people have access to the funds, and can make deposits or withdrawals, as well as set up regular standing orders (such as rent or mortgage repayments) and direct debits (for example, to pay utility bills and council tax).

Joint accounts are a great way of sharing the costs and expenses of living together simply and fairly. It’s easy to transfer a regular amount from your salary to cover all the outgoings. But the biggest downside of opening a joint account is the risk that one partner can withdraw the funds in the account without the permission of the other. However, some joint accounts require both parties to give their permission before transactions are made.

It’s therefore important to establish some ground rules before opening a joint account. These rules could include:

• agreeing the amount to pay into the account each month (and sticking to it!)
• setting a monthly spending budget so you don’t run up large overdrafts or charges for going beyond your limit
• setting up regular reviews that give both parties the chance to check how things are going – this will let you monitor your spending habits, keep track of where your money is going, and allow you adjust as necessary

Perhaps the main thing to remember with running a joint account is the importance of being open, honest and communicative. Trust us, it will prevent lots of arguments in the long run.

Research conducted by the University of Michigan in 2018 suggested people’s attitudes towards money are formed in childhood, often beginning from as early as five years old! It’s, therefore, no surprise that many people find managing money to be a very complicated, sensitive and emotional subject. Those feelings can be even more intense when you’re in a relationship.

It can be incredibly difficult when the person you plan to spend the rest of your life with has a completely opposing attitude towards spending and saving to yours. Couples rarely take the time to really understand each other’s views on managing money – it’s not exactly a sexy topic of conversation. But learning about your partner’s financial habits is an excellent way to set boundaries, and to help you plan your life together with confidence. For example, it’s important to have open and honest conversations about debt, without feeling any embarrassment or shame. If one partner has accumulated large debts, or has a poor credit score, and tries to hide it from their partner, they could be storing up big trust issues that damage the relationship further down the line.

Equally, it’s essential to be honest and upfront about your financial priorities. If one of you wants to put money aside for a house deposit, while the other wants to spend their disposable income on exotic holidays, you won’t be working in harmony to save towards the same goals. Money disputes are the number one cause of relationship breakdowns, but taking the leap and having honest conversations about these topics can work wonders.

Building a life together and buying your first home can be exciting and nerve-wracking at the same time, especially when you start to consider the financial decisions you both need to make.

If you’re not sure where to start, Amber River can help. Our independent financial planners have plenty of experience helping couples understand what to consider before making any decisions, and we won’t be too shy to ask the tough questions you need to know the answers to. So, whether this is your first Valentine’s Day together, or one of many, we can help you feel better prepared for the future, with a financial plan you’re both fully on board with that is just the right combination of the head and the heart.