Q: I work at a management consultancy and receive a good salary, though I still rent a flat with a university friend. I want to buy my own house now but feel really guilty because my flatmate is on a very low salary and can't afford to buy with me. Should I lend him some money? If so, I'm worried that it might sour our friendship. I feel uncomfortable broaching the subject with him.
Jeremy Bullmore: You're right to worry. It's not always a mistake to mix up money and friendship but it usually is. And lending someone money so that you can both pretend that you're buying the house between you is doubly hazardous. The relationship will never feel entirely comfortable; and when your circumstances change, as they inevitably will, all sorts of new problems emerge. Either you want your money back or you want the house to yourself or you want to sell it. And then you have to work out whether the friend should have his share of any increase in value despite not having paid you any interest, or even worse, how to make a fair adjustment if the price of the property falls - and before you know what's happened, you and your best friend are locked in a bitter dispute from which you may never recover.
If you can afford to lend him his share of the house price, you can presumably afford to pay for the whole thing yourself. Then you could rent him a room, or probably more than one, at a reasonable market rate. That's a perfectly straightforward arrangement that can be modified easily at any time. Resist the temptation to offer him special terms; that would be patronising.
If he feels it's demeaning to be your lodger, or you feel uncomfortable being his landlord, you're both being altogether too sensitive. Make it simple and businesslike and, above all, unambiguous.
Jeremy Bullmore is a former creative director and chairman of J Walter Thompson London. His book Another Bad Day at the Office? is published by Penguin at £6.99. Address your problem to Jeremy Bullmore at: email@example.com. Regrettably, no correspondence can be entered into.