Spend a week on Twitter and I guarantee you you’ll see some sort of money diary or ‘how I bought my four bedroom house in London Bridge’ article somewhere online. They’re all the rage, and everyone likes to click on them and get angry.
Well, I just bought my first flat, and I thought I would be as transparent as possible about it. To be honest part of my reasoning for writing this down is so that I can come back to it and remember how shitting complicated it is and how many things there are to think about, and I figured maybe at least one other person might find it useful.
I’m not going to lie, I benefitted significantly from having been given a lump sum of money a few years ago, so I don’t really consider this whole buying thing as me having ‘done it all myself’. I was very lucky. I invested it in stocks and shares and I always had the money as a buffer. But I also had a ridiculously complicated system of savings accounts set up, which made my money work a bit harder for me. I worked from the top down when I could afford to. Here’s what I had:
- Virgin Money Help to Buy ISA (£200 a month, best interest rate I could find)
- HSBC Regular Saver (5% interest locking in £250 a month for 12m)
- Santander Regular Saver (5% interest locking in £200 a month for 12m)
- Chip app (5% interest for me)
- Funding Circle (average interest rate for me: 6.2%)
- Zopa (average interest rate for me: 4.1%)
- Ratesetter (average interest rate for me: 3.2%)
- Plum (no interest, but randomly saves bits of money)
The key to it, I found, was scheduling savings to come out immediately after being paid. I have a running spreadsheet which calculates all known outgoings for the next month, and so I know on each day how much money I ‘should’ have. At one point I saved about £500 a month and I never needed to touch it. Now, post-buying and in mild-but-ever-encroaching debt thanks to buying furniture, I have no idea how the hell I did that and I now have no buffer whatsoever. Great planning, there.
Finding the one
With my budget of 180k, I started looking for a flat, quite vaguely, from about September last year. I had just moved to Cardiff in May and I had my reservations about it, but I realised that it was probably the best (my only?) opportunity to buy a place. By about March/April 2018 I had decided I would definitely do it, but I was extremely naive about the whole thing.
I originally wanted a Victorian house converted into flats, because I loved the look of the flat I rented and I thought if I got a new conversion I would be happy since it would be the best of both worlds — in a beautiful house but be modern and insulated etc. I wanted to stay in Roath or move to Canton which is much livelier and ‘cooler’.
The council put an end to all my ambitions. In mid-May I almost put an offer in on a cute little flat in Riverside, close to Canton. It was actually tiny but it was well below my budget and I could live with it being tiny because it was in a nice house and a fairly convenient location. Parking was ‘on the street’ and it wasn’t until a friend pointed out that the council are a bit weird about permits, that I actually looked into it. Cardiff Council has a policy of not giving parking permits out to anyone in new buildings or new CONVERSIONS.
So I changed tact: the only place I knew where they had developments with parking on-site was the Bay. I didn’t particularly want to live there because it’s further away from work and feels quite remote. Not long after, I came across the development I‘m in. Ooh, luxury development! Parking! Apartments in my budget! Since the building and all the apartments were already built, I visited, and fell a bit in love with the layout of the flat (I actually hadn’t seen MY flat itself until after reservation) and everything about the development.
What’s a girl gotta do to buy a flat around here
I had seen my sister go through the process of buying a flat (twice) but to be honest not much wisdom was imparted that was relevant to a new build. Most of the issues were quite unique to buying ‘second-hand’ homes, like ‘get a survey!’, ‘make sure the walls aren’t falling down!’ which is helpful but not for a new build.
For a rough timeline, I first saw the apartment 19th May, I reserved on around 26th May, and my deadline for completion was end of June. I actually exchanged and completed on the same day, 9th August. It took about 12 weeks, which is quite quick, but boy was it painful at times.
Here’s how buying an apartment in a new build works (VERY important caveat that I did NOT buy off-plan!):
- Reserve the plot (bye-bye £1,000)
- Instruct a solicitor
- Sort mortgage (you should really start this when you’re looking. 100% recommend finding a mortgage advisor as you will get the best deals)
- Prove to everyone and their dog that you are good for the money (important: you need to declare any ‘gift’ money you are using)
- Hand over Help To Buy ISA documents to solicitor so they can magic up the money for you when you need it
- Read the contract and lease VERY CAREFULLY because you will need to query stuff that doesn’t make sense because apparently solicitors are idiots
- Sign papers and wait for exchange to happen; agree a completion date that you MUST stick to!
- Hand over all your life savings to your solicitor the day prior to completion
- Pick up the keys at noon (ish) on completion day
- Sit on the floor your empty flat and cry / get drunk / eat takeaway
- Snagging (a process I’m still going through)
The sticking points
There were a few days where I really felt like I was making a huge mistake, and I very seriously wanted to not go ahead, but for the most part I was ok with it, even if the process took a long while and was super stressful for the last fortnight or so. It was incredibly frustrating for me living in a flat that had basically outlived its usefulness to me (Victorian plumbing…just...don’t go there) and I was desperate to move and get everything sorted.
Some key things I think you need to be aware of before buying:
- If you don’t have parking included, can you park on the street? Check that the council will actually give you a permit!
- Get a mortgage broker you like and trust. Mine held my hand through the process far more than he should have. He helped with reassuring me about the process and different things that were happening.
- Lenders will likely not give you 90% LTV on a new build which means you need to find a deposit greater than 10%
- Lenders are also picky about buildings with commercial units
- … And buildings which are taller than a certain number of storeys
- [Neither of these mean you won’t get a mortgage, but can significantly reduce your options and mean you have a slightly worse interest rate! Which is exactly what happened to me]
- I didn’t go for the Help to Buy *loan* because I am incredibly sceptical of how easy it is to get out of. I understand this might be useful for some people to get on the ladder but make sure you understand the implications; when the property is sold, the % value of the loan you took will be taken from the sale. That’s how the government makes money…
- You think it won’t be stressful, but somehow the very act of trying to buy a property means that you are like a stress sponge and absorb ALL THE STRESS ALL THE TIME and nothing ever seems to go right. It is ok. Millions of people have done it and survived; hang in there.
- Don’t do what I did, and ignore the pressing need for furniture. Budget for furniture and then you won’t spend weeks without a bed like me.
The worst bits
A few things that stood out to me as being particularly painful that I think were unique to my situation/development:
- Having to send a certified copy of my passport to my mortgage broker, using the solicitor as the certifier, but the solicitor’s office not certifying it properly, TWICE. This delayed everything by 3–4 weeks. ARGH. WHY.
- Had to change the mortgage and deposit value which was basically completely unexpected at the point it happened
- I almost lost my mortgage deal with a £1,000 incentive because of aforementioned dicking about
- I told my landlord I was leaving on a specific date (giving him 5 weeks’ notice, more than he needed) but I didn’t know if I was actually completing before that date or not. ARGH!
- The contract and lease were straight-up wrong about basic facts, like my address, the amount of my ground rent, some confusing wording about when payments are due, etc
So there you go. I bought an apartment the week before I turned 30, and I learned a lot during the process. I have started trying to get the snagging stuff sorted but not sure how long it’ll take. For the most part I am extremely happy with the build quality of my apartment, but there are minor issues like cracks in skirting boards, floor coming up a little due to the heatwave, etc.
I’m hoping that the next time I buy a property (IF I do), I will be better armed with more information and understanding about exactly how it works, and I won’t be so bloomin’ naive.