Moving in with your partner: romantic or convenient?
From joint bank accounts to financial transparency, we reveal people’s top priorities when buying a house with a partner.
The increased importance first-time buyers in relationships are placing on ‘financial stability’ is perhaps no surprise given the soaring costs of property. And with more people snapping up properties, the rise in UK house prices could be set to continue.
One of the factors driving buyers is the Stamp Duty holiday, unveiled in July 2020 for England and Northern Ireland. It was introduced to help boost the property market and support buyers whose finances were affected by the Covid-19 pandemic.
While this temporary tax exemption has been beneficial, allowing many buyers to save up to £15,000, not everyone can afford to buy a house due to increasing prices. Over time, it’s become more difficult to get on the property ladder, particularly for many young people.
With the recent property market boom and its impact on buyers, NerdWallet surveyed 1,000 people in the UK to find out the attitudes and behaviours of potential buyers and homeowners.
- More than half (56%) of respondents believe that it’s appropriate to move in together within one year of dating – and finances are a key driver: 18% moved in with their partner because it was financially beneficial.
- 58% of people claim that they consider a partner to be more attractive if they are financially stable.
- 76% place importance on knowing everything about their partner’s finances before moving in together.
- More than a quarter (27%) of people would rather keep their finances separate from their partner and not have a joint bank account at all.
Financial stability top priority for couples as house prices rise
Our findings revealed that financial stability is a top priority amongst Britons. This is no surprise as property values were found to be 10.2% higher in March 2021 than a year earlier – the fastest annual rate of growth since August 2007, according to the ONS.
Indeed, 18% of people surveyed said that they moved in with their partner because it was financially beneficial – showing that practicality and stability are of utmost importance in today’s market. This is especially true for younger generations of buyers: 30% of 25- to 34-year-olds confessed that they moved in with their partner because it was financially beneficial and 23% of 18- to 24-year-olds said the same.
What’s more, men are more likely to move in with their partner because it is financially beneficial (21% men vs. 15% women).
Lifestyle matters in the race for space
Unlike recent property booms over the last decade, the largest increases in house prices have been outside of London. According to the UK property website Rightmove, the most notable increases can be seen in the North West, West Midlands, South West, East of England, and Wales.
This is because many buyers are opting for larger homes with a garden area as a result of the pandemic and subsequent lockdowns, with more people working from home or being allowed the option of fully remote working indefinitely. According to Nationwide’s House Price Index, many buyers are engaged in a ‘race for space’ with 30% of people considering a move to access a garden or outdoor space more easily, while the majority of people are seeking to move to less urban areas.
This reflects our findings as 64% of people think practical factors such as lifestyle are important to consider when moving in with their partner.
The attraction of settling down is strong
With house prices rising faster than wages, it’s not difficult to see why people are more aware of their finances and are making financial security a priority, especially first-time buyers.
In fact, 24% of 18- to 24-year-olds and 40% of 25- to 34-year-olds – the age groups most likely to be first-time buyers – feel that being with someone who can fulfil their life ambitions of owning a home and supporting a family to be very important. These stats are far higher than the all-ages average of 18%, suggesting that the dream of settling down is very much alive for younger generations.
Interestingly, 58% of people claim that they consider a partner to be more attractive if they are financially stable. This rises to 72% of 18- to 24-year-olds surveyed, 82% of 25- to 34-year-olds and 67% of 35- to 44-year-olds.
Couples crave financial transparency
Certain aspects of your financial history could impact how much money you can borrow for a mortgage. One factor that mortgage providers will use to help determine whether you’re eligible for a mortgage is your credit rating.
A credit rating details your experience with credit, from previous mortgages and credit cards to certain bills like your phone or utilities. This will give lenders an idea of how good you are at managing your money. If you have a poor credit history, for example as a result of late repayments on a credit card or phone bill, then you may not be accepted for some mortgages, or you might be offered a deal with a higher interest rate.
There are also certain debts and loans that could impact your eligibility for a mortgage.
This is why it can be useful to share information with your partner about your finances before applying for a mortgage with them. Our survey respondents shared this sentiment, with 76% saying that knowing everything about their partner’s finances before moving in together is important.
Homebuyers say sharing is caring when it comes to finances
Most people want to know about their partner’s finances in the very early stages of their relationship. Several of our younger respondents think it’s appropriate to ask about finances even before the first date! 14% of 18-24-year-olds and 14% of 25- to 34-year-olds said it’s okay compared to the all-ages average of 6%.
Additionally, 17% of 18- to 24-year-olds and 18% of 25- to 34-year-olds said it’s appropriate to ask about finances from the first date onwards (compared to the average of 9%). Just over a quarter (27%) of 18- to 24-year-olds and 32% of 25- to 34-year-olds think it’s inappropriate to ask about finances until they’re an official couple (compared to the average of 45% – almost half of all respondents).
Only 11% of people thought that personal finances should be private and that it is never appropriate for a partner to ask about them, while just 10% believe that it is only appropriate to ask a partner about their finances when it is absolutely necessary (eg. for a loan application).
Couples keen to keep their own finances
While couples crave financial transparency and stability, almost two-thirds (63%) are keen to keep their finances to themselves, either completely or only sharing a joint account for shared outgoings.
When asked about joint bank accounts, more than a quarter (27%) of our respondents said they would rather keep their finances separate from their partner and forgo a joint bank account.
There are pros and cons to joint bank accounts, with most dependent on your individual situation. For example, all account holders have as much right to the money as each other – you can't easily control or restrict access. In some cases, if one of the account holders has a poor credit rating, this could impact the second person’s credit rating.
However, joint current accounts can be helpful to homeowners for managing combined outgoings such as mortgage, rent, bills and food. 36% of our respondents see the benefit, saying that they would use a joint bank account for joint outgoings and only contribute the necessary amount needed, keeping the rest of their income in a personal account.
Trust is essential when weighing up ‘fair share’
While respondents like to keep their finances separate, our findings also revealed that equal sharing of the deposit, mortgage and bills is also important. In fact, 75% believe that putting in equal amounts towards a house deposit is important.
There are some cases, in which one of the homeowners may not be able to match their partner’s deposit or contribute as much towards the mortgage. In this situation, 41% said they’re happy to still split and pay the bills equally, even if they pay the majority of the mortgage.
Some respondents felt the lower contributor should pay more for certain aspects of living. For example, 29% expect the lower contributor to pay a bigger share of the bills and 15% expect them to do more household chores – 9% even said they expect to be treated more regularly to a night out!
Regardless of how bills and mortgage payments are split, 76% believe that having a declaration of trust in place is essential if one person is putting more money into a house deposit than another. A declaration of trust is a legal document that sets out each person’s financial contribution so that a property can be divided fairly if a couple breaks up.
While thinking about the end of your relationship may not be front of mind when you’re buying a house with your partner, it is an important consideration. Separating finances, such as splitting a joint mortgage or pulling out from a joint loan, can be a tedious process. Keeping some money separate might be a good option and should at least be a discussion point for you and your loved one.
Summary: romance isn’t dead
Our findings reveal that the majority of couples seek financial stability and transparency between one another, yet they want to keep at least some of their personal finances separate.
Our survey also highlights that people are not shy when it comes to talking about finances with their partner, especially the younger generation. Perhaps this is due to the mounting pressure and difficulty of being able to afford a house – with house prices climbing, it’s becoming increasingly difficult for people to get onto the property ladder.
It’s especially difficult for younger generations, and even more so for those looking to buy on their own. If you are moving in on your own and need some mortgage advice, see our single person mortgage guide.
While the majority of respondents heavily consider the practical and financial aspects of moving in together, people also consider the more ‘romantic’ aspects of moving in with a partner. Two-thirds (65%) of our respondents said they moved in with their partner because it was the right time to take the next step in their relationship – a heart-warming stat that shows romance is still alive alongside the practicality of financial decision-making.
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The market research was carried out between 27th and 29th May 2021 among 1,000 UK adults via an online survey by market research agency 3Gem. The data sample of 1,000 UK adults is fully nationally representative. This means the sample is weighted to ONS criteria so that the gender, age, social grade, region and city of the respondents corresponds to the UK population as a whole.
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Richard Eagling is former editor of Business Moneyfacts and Investment Life & Pensions Moneyfacts. He has been reporting on financial issues for over two decades and is a regular press contributor. Read more