The significant rise appears to be a reflection of the fact more and more people appear to be enlisting the help of friends to get onto the housing ladder.
Jeremy Hicks, corporate affairs controller at the Chelsea, said the lender has seen the number of applications with different surnames rise from 11 per cent of all applications to 16 per cent over the last five years, despite no change in the number of joint mortgage applications - almost exactly the same at 63 per cent.
Hicks said brokers will find there is an opportunity here, however small, despite the fact many will be focusing on the remortgaging market or repurchasing market.
“We have checked the tenancy agreements and generally, most of these will be for first-time buyers in their twenties with only one employer on their records.”
He added: “We haven’t noticed any increase in arrears levels across the board in the last five years, but on the whole we would look at applications of more than two with a little more intensity.”
Abbey National is currently offering a two-year tracker mortgage at 3.84 per cent for up to four buyers which has more generous income multiples and Lambeth Building Society also offers a two-year discount at 3.49 per cent with no extended ties.
Mortgage brokerage, Clear Cut Mortgages has put together some straightforward advice for clients considering this route. (see box below)
BenThompson, director at Clear Cut Mortgages, said: “Getting a joint mortgage is a very important investment and there are a number of key legal and financial arrangements that must be made before making the leap.”
Advice for intermediaries with multiple buyer clients
1. Advise them on renting together before purchasing.
2. Help them decide which lending assessment suits them better; income multiples or affordability and make sure everyone can keep up with the repayments.
3. Pick a product with a short or no tie-in. Circumstances may change, so it’s a good idea to get clients to agree a notice period together before they buy.
4. Advise tenants to get a Tenancy in Common agreement, because a joint tenancy agreement implies the property is owned equally and automatically passes to the other tenant if the other dies.
5. Also, Tenancy in Common agreements allow buyers to take a larger share of the equity if they have invested more in the mortgage.
