Buying a Home, Building an Estate: What diaspora couples should agree on before owning property together

For many African couples in the diaspora, buying a home is not simply another stage of adult life. It may be the first substantial asset created by a family with little inherited wealth in the country where the couple now lives.

The deposit is often not strengthened by help from parents. The financial flow may be moving in the opposite direction as the couple supports relatives in Africa while paying rent, meeting immigration costs and saving for a home. Some couples are not buying a home with help from their parents. They are buying a home while helping their parents survive.

One spouse may have saved more directly towards the deposit, while the other carried remittances, childcare or everyday costs that made those savings possible. The transfer to the solicitor may show who contributed more cash at completion, but not the whole partnership behind it.

After years of renting or living with immigration uncertainty, receiving the keys may represent stability, belonging and evidence that migration has produced something lasting.

Financially, however, the house is an asset while the mortgage is the liability used to finance it. Equity is broadly the property’s market value minus the outstanding borrowing secured against it. If a house is worth £300,000 and the mortgage balance is £240,000, the household has about £60,000 of equity before selling costs. The value of the house is not the same as the wealth the household can claim from it.

The part of a mortgage payment that repays principal reduces debt and builds equity. Interest is the cost of borrowing and does not create ownership. Equity may rise as the loan is repaid or the property appreciates, but it can also fall if prices decline. Property can build wealth, but it does not guarantee a profitable return.

Renting still buys accommodation, flexibility and freedom from many repair costs, although it gives the tenant no ownership share. Homeowners may build equity, but also carry interest, maintenance, insurance and transaction costs. Rent buys accommodation and flexibility. A mortgage can buy accommodation while gradually building an asset, but ownership also carries costs and risk.

Property is relatively illiquid. Selling takes time and leaves the family needing somewhere to live. Borrowing against accumulated equity releases cash only by creating more debt and placing more of the home at risk.

Home equity can strengthen a family’s balance sheet, but borrowing against it turns part of that strength back into debt.

A house should therefore not become the family’s entire financial plan. Diaspora households may need money quickly when a parent becomes ill or a funeral occurs abroad. Wealth tied up in walls cannot always meet an urgent need. Families still require emergency savings, pensions and liquid investments alongside property.

Once the financial meaning of the house is understood, the next question is ownership. For most couples buying an ordinary family home, direct personal ownership will usually be the clearest starting point. Companies and trusts may have uses, but they should not become the default merely because they sound sophisticated.

Having both names on the mortgage and title does not answer every question. The mortgage identifies who is responsible to the lender; the ownership arrangement determines how the couple benefits from the property and what happens when one owner dies.

In England and Wales, couples commonly hold the beneficial interest as joint tenants, where the survivor normally receives the property automatically, or as tenants in common, where defined shares can pass under a will. Rules differ elsewhere, so appropriate legal advice matters.

A shared address does not automatically create a shared understanding of ownership.

One spouse may assume that the house belongs equally to both because they are married. The other may believe that a larger deposit or higher mortgage contribution creates a larger claim. Equal ownership may suit couples who treat the home as one shared family asset. Unequal shares may suit couples who deliberately want ownership to reflect different contributions.

The danger is not either choice. It is two people living in the same house while believing they agreed to different financial arrangements.

The deposit is often given too much authority. One spouse may have accumulated more cash, but the other may have covered rent, remittances, childcare and daily expenses while those savings were being built. The deposit may show who arrived at completion with more money, but not the history that made it possible. The deposit may open the door, but it does not necessarily pay for the whole house.

The same applies after purchase. One spouse may pay the mortgage while the other covers food, utilities, transport, insurance and childcare. The bank statement may make one person appear to be building the property alone, even though the other is financing the household around it.

The couple should agree whether the home is a shared family asset or whether ownership should follow financial contributions more closely. Major later payments, such as an extension or substantial mortgage overpayment, should also not be left to competing memories. The person making the mortgage payment is not always the only person making the mortgage possible.

For most households, the strongest arrangement remains straightforward: direct ownership, clear documentation, suitable insurance and properly prepared wills. Companies and trusts can serve specific purposes, but may bring additional legal, tax and administrative consequences. The most complicated structure is not necessarily the most intelligent one.

The property question may also extend across countries. While buying a home in Britain, the couple may be building a house for parents, contributing towards family land or investing in property in Zimbabwe, South Africa or elsewhere. These assets may carry enormous emotional meaning, but emotional ownership is not always legal ownership.

Who owns the land, who may occupy it, and can it be rented or sold? Is the money a gift, family support or an investment? Someone can spend for years improving property they do not legally control. A couple should not spend years building an asset whose ownership exists only in family conversations.

The couple should also decide what each property is meant to do. A house in Africa may provide accommodation for parents, become a future retirement home, generate rental income or pass to children, but one building cannot always serve all those purposes.

A home occupied by parents may fulfil an important responsibility without being a liquid investment belonging entirely to the couple. That does not make the spending wasteful. It simply means family support and personal investment should not be confused.

As the mortgage declines and equity grows, the home becomes part of the family estate. Estate planning should begin with the surviving spouse. If one person dies, can the other continue paying the mortgage, insurance, maintenance and living costs? A valuable house does not automatically create an affordable home when one income disappears.

Life insurance may help reduce the mortgage or replace lost income, while wills and ownership arrangements should support the same intention. Some couples may want the survivor to inherit the property outright. Others may want the survivor to remain securely housed while preserving part of its value for children.

Property ownership answers who holds the asset today; estate planning answers who should benefit from it tomorrow.

The house may represent decades of migration, remittances and sacrifice, yet the children may establish careers elsewhere or have no interest in becoming landlords. Leaving several children one indivisible property can transfer disagreement alongside wealth.

Children do not always need to inherit the house. They may need to inherit the value the house created.

Selling the property after both parents have died is not necessarily the destruction of a legacy. It may be the clearest way to release and distribute the wealth the couple spent decades building. The same applies to property in Africa, which may carry emotional value while producing little accessible financial value and requiring maintenance from abroad.

The plan should be reviewed after major family, property or financial changes. A new child, migration, a second property, serious illness or changing income can make the original arrangement unsuitable.

Buying a home together should end with more than a mortgage and a set of keys. The couple should understand how the property is owned, how the debt will be carried, what unequal contributions mean, how the surviving spouse will be protected and whether the children should inherit the building or its value.

The family home should protect the couple while they are living and transfer value clearly when they are no longer there.

For many diaspora couples, buying a home is not the continuation of inherited wealth. It is the beginning of it. The strongest legacy may therefore be more than the house itself. It may be the liquidity, clarity, protection and financial foundation that the property helped the next generation inherit.

**Dr Shame Mugova is a Lecturer in Finance at Birmingham City University. The views expressed are his own and do not necessarily reflect those of NewZimbabwe.com **

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