Three years ago, I finally got my foot on the bottom rung of the property ladder. Well, half a rung, really. I was one of the many people who, desperate to join the smug set of dinner-party property bores, decided to buy a property with a friend.

Like all the best ideas, it was born one night in the pub, when the friend – Dan – and I were a few pints into a familiar evening of self-pity, bemoaning the soaring cost of housing and our lack of a long-lost sheikh relative with deep pockets and a benevolent nature. We had rejected early on the idea of marrying to pool resources – our girlfriends, rather than each other – but we did hit on the idea of marriage of a different kind: one of convenience.

The property pages – Home among them – were beginning to carry stories about a new type of property owner, the co-buyer: people who had teamed up with friends, relatives, even strangers they had met on the internet, so they could afford to buy a place of their own. To us, it seemed the perfect solution: with our combined salaries, we could actually afford a half-decent property, and would pay only half the stamp duty, legal fees and other costs.

No matter that, much like working with animals and children, going into “business” with friends is often held up as a nono. On the contrary, this was the start of something big: together, Dan and I would buy a comfortable bachelor pad, have wild parties, do minor repairs (as a result of the parties), then, as the property’s value rose and rose, remortgage it, release a little equity to pay off our credit cards, do some improvements and, of course, have more wild parties.

And so it would continue. Like those fortunate enough to get into a pyramid scheme early, our place would be worth more and more. A few remortgages later, we would retire to a palm-fringed tropical island on the proceeds.

By this point, we had moved from pints to shorts, but you get the idea – the same one, in fact, that occurred more or less simultaneously to plenty of other people up and down the country, convinced that the only way for the property market was up. We both realised, of course, that romantic entanglements meant that, one day, we would probably go our separate ways – but by that time, we reckoned, our property would be worth so much, it would simply be a matter of sharing the spoils.

The next bit was easy. We quickly settled on a small Victorian terraced cottage, with garden, in up-and-coming Crystal Palace, southeast London. (The East London line extension was on its way, and the area was destined to be popular with professionals priced out of smarter Clapham and Dulwich.) A mortgage was easily obtained and, in June 2005, we moved in and set about buying the essentials: washing machine, fridge, sofa, stupidly large television. Everything was going according to plan. We had the parties. We decorated. We even made some improvements.

After two years, we were able to remortgage, take out that little bit of equity and pay off some debts. No longer did I have to smile through gritted teeth at dinner parties. Then, just as I was dreaming of that palm-fringed beach, my friend and co-owner came back from one – engaged.

Suddenly, the upheaval that had seemed far off was a reality. Dan suggested renting out his room and using the proceeds to pay the mortgage on a place for him and his wife-to-be. By then, the price of other properties had soared, and it became clear that the only way they could afford a family home was for Dan to “realise” the profit he had made in our cosy cottage.

My initial reaction was one of shock. Then, human nature being what it is, I began to see the positive side: this could be my opportunity to make even more money – the East London line was two years from completion, meaning a lot more capital appreciation to go – and own a whole property myself.

So we agreed that I would buy out Dan. There followed a period of what is best described as “light sparring”, as we thrashed out an agreed house valuation. Dan, naturally, went for the highest – £305,000 – of the four agents’ valuations. I preferred the lowest, which was £45,000 less, but still £62,000 more than we had paid three years earlier.

In February, we finally agreed a figure – somewhere in the middle – and I flew off to Australia for a well-earned three-week holiday, dreaming of being not only a homeowner, but a landlord and fledgling property tycoon.

I returned from the sun to the ever-darkening clouds of subprime problems and crunching credit. To buy Dan’s share, I needed to borrow 5.8 times my salary, but my bank was now lending only five times – and would not be budged. Several mortgage brokers later, the answer was the same; in fact, the five-times-salary offer was looking rather generous.

Especially hard to swallow was the fact that, a month earlier, my application would have sailed through. With my employers surprisingly unwilling to raise my salary, I was in danger of heading back to square one: not being able to afford a home of my own again.

The solution? Well, that was born on another evening in the pub. I was bemoaning my situation with Adam, a work colleague, who couldn’t afford to buy on his own and ... the rest of the tale is a familiar one. Suffice to say that I haven’t quite given up hope of the desert island, and there is a new horizon. In the meantime, well, there’s a party or two to be had.

Two can play that game: tips for co-buyers

For some of the estimated 200,000 people who co-own homes in the UK, the reality of being trapped by tumbling house prices is kicking in. What can you do if things are going wrong – or if you need to get out?

If you are worried about meeting mortgage payments or falling into negative equity, discuss the options with your mortgage lender

If you can’t ride out the credit crunch, consider becoming co-landlords – move out of your place, let it and rent somewhere much cheaper (if necessary, on your own)

If you and your co-buyer need to split, letting out even a part of your property can allow you to go your separate ways

With first-time buyers now needing a deposit of at least 10%, co-buying looks set to stay. But there are ways to minimise the risks

If you’re looking for a “mortgage buddy”, or want advice on how the co-buying process works, visit sites such as www.buyingtogether.co.uk and www.co-buywithme.co.uk

Work out contingency plans for every outcome – if one of you loses your job, for example, or wants to move out, or get married

To share the rewards, you have to share the risks

Research alternatives such as the new shared-equity schemes; see www.housingoptions.co.uk

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