I would do it but 2 things for sure, put your name on the title and get a contract, just make sure its noted on the contract that he paid the deposit and he owns an extra percentage depending on how much the deposit is, if you ever go for any sort of loan out side the house then equity in the house is an asset but if your name is not on the title then i doubt the banks would accept it.
It could well end up in a shit fight but if he is a very good mate and you trust him then go for it, i would also take nismoids advice on plenty of room, expect there to be 4 people living there at times.
If after a few years you come to the conclusiuon that its not work out then sell the house (or one buys the other half) and split the equity.